<PAGE> 1
As filed with the Securities and Exchange Commission on June 27, 1995
Registration Nos. 33-64352; 811-7780
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
----------------------------------
FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 [ ]
Post-Effective Amendment No. 4 [X]
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 [ ]
Amendment No. 6 [X]
(Check appropriate box or boxes)
----------------------------------
STAGECOACH TRUST
(Exact Name of Registrant as specified in Charter)
Stephens Inc.
111 Center Street
Little Rock, Arkansas 72201
(Name and Address of Principal Executive Offices, including Zip Code)
----------------------------------
Registrant's Telephone Number, including Area Code: (800) 643-9691
Richard H. Blank, Jr. With copies to:
c/o Stephens Inc. Robert M. Kurucza, Esq.
111 Center Street Marco E. Adelfio, Esq.
Little Rock, Arkansas 72201 Morrison & Foerster
2000 Pennsylvania Ave., N.W.
Suite 5500
Washington, D.C. 20006
It is proposed that this filing will become effective (check appropriate box):
[X] Immediately upon filing pursuant [ ] on __________, pursuant to
to paragraph (b), or paragraph (b), or
[ ] 60 days after filing pursuant [ ] on __________ pursuant to
to paragraph (a), or paragraph (a), of Rule 485, or
[ ] 75 days after filing pursuant [ ] on (date) pursuant to
to paragraph (a)(2), or paragraph (a)(2), of Rule 485.
If appropriate, check the following box:
[ ] this post-effective amendment designates a new effective date for a
previously filed post-effective amendment.
<PAGE> 2
The Registrant has registered an indefinite number of shares of its Common
Stock, $.001 par value, under the Securities Act of 1933, pursuant to Rule
24f-2 under the Investment Company Act of 1940, as amended. The Rule 24f-2
notice for the fiscal year ended February 28, 1995, will be filed with the
Securities and Exchange Commission on or before April 28, 1995.
This Post-Effective Amendment to the Registrant's Registration Statement has
been executed by Master Investment Portfolio (another registered investment
company with separate series in which certain of the Registrant's series
invest substantially all of their assets) and by such company's trustees and
principal officers.
<PAGE> 3
EXPLANATORY NOTE
This post-effective amendment relates only to the following funds of
Stagecoach Trust: the LifePath 2000 Fund, LifePath 2010 Fund, LifePath 2020
Fund, LifePath 2030 Fund and LifePath 2040 Fund. This post-effective amendment
includes the annual update of all audited financial information pertaining to
the Funds and each Fund's corresponding Master Series.
<PAGE> 4
LIFEPATH FUNDS -- RETAIL SHARES
Cross Reference Sheet
Form N-1A Item Number
<TABLE>
<CAPTION>
<S> <C>
Part A Prospectus Captions
- ------ -------------------
1 Cover Page
2 Description of the Funds
3 Financial Highlights
4 Management of the Funds; General Information;
Appendix
5 Management of the Funds; General Information
6 Management of the Funds; How to Buy Shares;
How to Redeem Shares; Exchange Privilege;
Dividends, Distributions and Taxes;
7 How to Buy Shares; How to Redeem Shares;
Exchange Privilege; Performance Information
8 How to Redeem Shares; Exchange Privilege
9 Not Applicable
Part B Statement of Additional Information Captions
- ------ --------------------------------------------
10 Cover Page
11 Table of Contents
12 Not Applicable
13 Investment Objectives and Management Policies;
SAI Appendix
14 Management of the Trust; Management
Arrangements
15 Information About the Funds; Capital Stock;
Management of the Trust
16 Management of the Trust; Custodian, Transfer
and Dividend Disbursing Agent; Independent
Auditors; Counsel
17 Portfolio Transactions
18 Capital Stock
19 Purchase and Redemption of Shares;
Determination of Net Asset Value
20 Dividends, Distributions and Taxes
21 Management Arrangements
22 Performance Information
23 Financial Statements
Part C General Information
- ------ -------------------
24-32 Information required to be included in Part C
is set forth under the appropriate Item, so
numbered, in Part C of this Document.
</TABLE>
<PAGE> 5
[STAGECOACH FUNDS LOGO]
------------------------------
PROSPECTUS
------------------------------
STAGECOACH LIFEPATH(TM) FUNDS
LIFEPATH 2000(TM) FUND
LIFEPATH 2010(TM) FUND
LIFEPATH 2020(TM) FUND
LIFEPATH 2030(TM) FUND
LIFEPATH 2040(TM) FUND
RETAIL CLASS
June 28, 1995
<PAGE> 6
STAGECOACH FUNDS(R)
STAGECOACH LIFEPATH(TM) FUNDS
The LIFEPATH FUNDS consist of five asset allocation funds (the "LifePath
Funds") offered by Stagecoach Trust (the "Trust"), an open-end, management
investment company. By this Prospectus, the Trust is offering shares of the
Retail Class of the five LifePath Funds. The LifePath Funds seek to provide
long-term investors with an asset allocation strategy designed to maximize
assets for retirement or for other purposes consistent with the quantitatively
measured risk investors, on average, may be willing to accept given their
investment time horizons. EACH FUND INVESTS ALL OF ITS ASSETS IN A SEPARATE
SERIES (EACH, A "MASTER SERIES") OF MASTER INVESTMENT PORTFOLIO (THE "MASTER
PORTFOLIO"), AN OPEN-END, MANAGEMENT INVESTMENT COMPANY, RATHER THAN IN A
PORTFOLIO OF SECURITIES AND, AS SUCH, MAY BE CONSIDERED A FEEDER FUND IN A
MASTER/FEEDER STRUCTURE. EACH MASTER SERIES HAS THE SAME INVESTMENT OBJECTIVE AS
THE FUND BEARING THE CORRESPONDING NAME. THEREFORE, EACH FUND'S INVESTMENT
EXPERIENCE CORRESPONDS DIRECTLY WITH THE RELEVANT MASTER SERIES' INVESTMENT
EXPERIENCE. SHARES OF THE MASTER SERIES MAY BE PURCHASED ONLY BY OTHER
INVESTMENT COMPANIES OR SIMILAR ACCREDITED INVESTORS.
This Prospectus sets forth concisely information about the Trust and Funds
that a prospective investor should know before investing. It should be read and
retained for future reference. A Statement of Additional Information, dated June
28, 1995, which may be revised from time to time, provides a further discussion
of certain areas in this Prospectus and other matters which may be of interest
to some investors. It has been filed with the Securities and Exchange Commission
and is incorporated herein by reference. For a free copy, write to the Trust c/o
Wells Fargo Bank, N.A. - Shareholder Services, P.O. Box 7033, San Francisco,
California 94120-9517, or call 1-800-222-8222.
FUND SHARES ARE NOT DEPOSITS OR OTHER OBLIGATIONS OF, OR ISSUED, ENDORSED OR
GUARANTEED BY WELLS FARGO BANK, N.A. OR ANY OF ITS AFFILIATES. SUCH SHARES ARE
NOT INSURED BY THE U.S. GOVERNMENT, THE FEDERAL DEPOSIT INSURANCE CORPORATION,
THE FEDERAL RESERVE BOARD OR ANY OTHER AGENCY. AN INVESTMENT IN A FUND INVOLVES
CERTAIN INVESTMENT RISKS, INCLUDING POSSIBLE LOSS OF PRINCIPAL.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION, ANY STATE SECURITIES COMMISSION OR ANY OTHER REGULATORY
AUTHORITY NOR HAVE ANY OF THESE AUTHORITIES PASSED UPON THE ACCURACY OR ADEQUACY
OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
PROSPECTUS DATED JUNE 28, 1995
PROSPECTUS
<PAGE> 7
Each LifePath Fund invests in the corresponding LifePath Master Series which
invests in a wide range of U.S. and foreign equity and debt securities and money
market instruments. Investors are encouraged to select a particular LifePath
Fund based on the decade of their anticipated retirement or when they anticipate
beginning to withdraw substantial portions of their investment.
- LIFEPATH 2000 FUND is managed for investors planning to retire (or begin to
withdraw substantial portions of their investment) approximately in the year
2000.
- LIFEPATH 2010 FUND is managed for investors planning to retire (or begin to
withdraw substantial portions of their investment) approximately in the year
2010.
- LIFEPATH 2020 FUND is managed for investors planning to retire (or begin to
withdraw substantial portions of their investment) approximately in the year
2020.
- LIFEPATH 2030 FUND is managed for investors planning to retire (or begin to
withdraw substantial portions of their investment) approximately in the year
2030.
- LIFEPATH 2040 FUND is managed for investors planning to retire (or begin to
withdraw substantial portions of their investment) approximately in the year
2040.
Retail Shares of each Fund are sold without a sales load, but are subject to
Rule 12b-1 fees. Investors can invest, reinvest or redeem Fund Shares at any
time without charge or penalty imposed by the Fund.
This Prospectus describes the Retail Class Shares. The LifePath Funds also
offer Institutional Class Shares, which are only available to certain eligible
investors. A free copy of the current Prospectus for the Institutional Class is
available by writing the Trust c/o Wells Fargo Bank, N.A. -- Transfer Agent, 525
Market Street, San Francisco, CA 94105 or by calling 1-800-776-0179.
WELLS FARGO BANK, N.A. ("WELLS FARGO BANK") SERVES AS EACH MASTER SERIES'
INVESTMENT ADVISER, WELLS FARGO NIKKO INVESTMENT ADVISORS ("WFNIA") SERVES AS
EACH MASTER SERIES' SUB-INVESTMENT ADVISER, AND TOGETHER WITH THEIR AFFILIATES,
WELLS FARGO BANK AND WFNIA PROVIDE OTHER SERVICES FOR WHICH THEY ARE
COMPENSATED. STEPHENS INC. ("STEPHENS"), WHICH IS NOT AFFILIATED WITH WELLS
FARGO BANK OR WFNIA, SERVES AS THE TRUST'S ADMINISTRATOR AND AS DISTRIBUTOR OF
EACH FUND'S SHARES.
PROSPECTUS
<PAGE> 8
TABLE OF CONTENTS
-------
SUMMARY OF FUND EXPENSES 1
FINANCIAL HIGHLIGHTS 2
DESCRIPTION OF THE FUNDS 3
RISK FACTORS 4
MANAGEMENT OF THE FUNDS 15
HOW TO BUY SHARES 20
HOW TO REDEEM SHARES 25
EXCHANGE PRIVILEGE 29
DIVIDENDS, DISTRIBUTIONS AND TAXES 30
PERFORMANCE INFORMATION 32
GENERAL INFORMATION 33
APPENDIX A-1
PROSPECTUS
<PAGE> 9
SUMMARY OF FUND EXPENSES
ANNUAL FUND OPERATING EXPENSES
(AS A PERCENTAGE OF AVERAGE DAILY NET ASSETS)*
<TABLE>
<CAPTION>
LIFEPATH LIFEPATH LIFEPATH LIFEPATH LIFEPATH
2000 FUND 2010 FUND 2020 FUND 2030 FUND 2040 FUND
----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Master Portfolio
Management Fees............. .55% .55% .55% .55% .55%
12b-1 Fees.................... .25% .25% .25% .25% .25%
Other Expenses
Shareholder Servicing
Fees**.................... .20% .20% .20% .20% .20%
Miscellaneous Expenses...... .20% .20% .20% .20% .20%
Total Other Expenses.......... .40% .40% .40% .40% .40%
Total Fund Operating
Expenses.................... 1.20% 1.20% 1.20% 1.20% 1.20%
* Other mutual funds may invest in a Master Series and such other funds' expenses
and, correspondingly, investment returns may differ from those of the LifePath
Fund that invests in such Master Series.
** A Shareholder Servicing Agent may charge certain fees, in addition to those
imposed by the Trust, for additional services provided by the Shareholder
Servicing Agent. Shareholder Servicing Agents are required to disclose any such
fees to their customers who are Fund shareholders.
</TABLE>
EXAMPLE:
<TABLE>
<CAPTION>
An investor would pay the
following expenses on a
$1,000 investment in the
Retail Class of the Fund,
assuming (1) 5% annual
return and (2) redemption
at the end of each time
period:
LIFEPATH LIFEPATH LIFEPATH LIFEPATH LIFEPATH
2000 FUND 2010 FUND 2020 FUND 2030 FUND 2040 FUND
--------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C>
1 YEAR............. $ 12 $ 12 $ 12 $ 12 $ 12
3 YEARS............ $ 38 $ 38 $ 38 $ 38 $ 38
5 YEARS............ $ 66 $ 66 $ 66 $ 66 $ 66
10 YEARS............ $ 145 $ 145 $ 145 $ 145 $ 145
</TABLE>
THE AMOUNTS LISTED IN THE EXAMPLE SHOULD NOT BE CONSIDERED AS REPRESENTATIVE
OF FUTURE EXPENSES, AND ACTUAL EXPENSES MAY BE GREATER OR LESS THAN THOSE
INDICATED. MOREOVER, WHILE THE EXAMPLE ASSUMES A 5% ANNUAL RETURN, EACH FUND'S
ACTUAL PERFORMANCE WILL VARY AND MAY RESULT IN AN ACTUAL RETURN GREATER OR LESS
THAN 5%.
The purpose of the foregoing table is to assist investors in understanding the
various costs and expenses borne by a Fund and a Master Series, and therefore
indirectly by its investors, the payment of which will reduce investors' return
on an annual basis for the Retail Shares. The Trust's Board of Trustees believes
that the aggregate per share expenses of a Fund and its corresponding Master
Series will be less than or approximately equal to the expenses such Fund would
incur if it directly acquired and managed the type of securities held by such
Master Series. Long-term shareholders in the Funds could pay more in sales
charges than the economic equivalent of the maximum front-end sales charges
applicable to mutual funds sold by members of the National Association of
Securities Dealers, Inc. ("NASD"). The information in the foregoing table does
not reflect any fee waivers or expense
1 PROSPECTUS
<PAGE> 10
reimbursement arrangements that may be in effect. For a description of the
various costs and expenses incurred in the operation of the Trust and Master
Portfolio, as well as expense reimbursements or fee waivers, see "Management of
the Funds."
FINANCIAL HIGHLIGHTS -- RETAIL SHARES
The following information has been derived from the Financial Highlights in
the Funds' financial statements for the fiscal year ended February 28, 1995. The
financial statements are attached to the Statement of Additional Information for
the Funds. The financial statements have been audited by KPMG Peat Marwick LLP,
independent auditors, whose report dated April 20, 1995 is also attached to the
Statement of Additional Information. This information should be read in
conjunction with the Funds' 1995 annual financial statements and notes thereto.
The Statement of Additional Information has been incorporated by reference into
this Prospectus.
FOR A SHARE OUTSTANDING FOR THE YEAR ENDED FEBRUARY 28, 1995:
<TABLE>
<CAPTION>
LIFEPATH LIFEPATH LIFEPATH LIFEPATH LIFEPATH
2000 FUND 2010 FUND 2020 FUND 2030 FUND 2040 FUND
--------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C>
Net Asset Value, beginning of
period............................ $ 10.00 $ 10.00 $ 10.00 $ 10.00 $ 10.00
--------- --------- --------- --------- ---------
Income from investment operations:
Net investment income............. 0.34 0.34 0.28 0.26 0.18
Net realized and unrealized
gain/(loss) on investments...... (0.14) (0.02) 0.12 0.13 0.34
--------- --------- --------- --------- ---------
Total from investment operations.... 0.20 0.32 0.40 0.39 0.52
Less distributions:
Dividends from net investment
income.......................... (0.27) (0.28) (0.23) (0.22) (0.15)
Distributions from net realized
capital gains................... (0.01) (0.05) 0.00 0.00 0.00
--------- --------- --------- --------- ---------
Total Distributions................. (0.28) (0.33) (0.23) (0.22) (0.15)
--------- --------- --------- --------- ---------
Net Asset Value, end of Period...... $ 9.92 $ 9.99 $ 10.17 $ 10.17 $ 10.37
========= ========= ========= ========= =========
Total Return (not annualized)....... 2.10% 3.31% 4.12% 4.03% 5.26%
Ratios/Supplemental Data:
Net assets, end of period (000)... $54,617 $36,764 $66,036 $41,153 $56,737
Number of shares outstanding, end
of
period (000).................... 5,503 3,679 6,494 4,045 5,472
Ratios of average net assets
(annualized):
Ratio of expenses to average net
assets(1)....................... 1.20% 1.20% 1.20% 1.20% 1.20%
Ratio of net investment income to
average net assets(1)........... 4.62% 4.40% 3.64% 3.35% 2.35%
Portfolio Turnover(2)............... 17% 24% 28% 40% 5%
</TABLE>
(1) This ratio includes expenses charged to the Master Series.
(2) The portfolio turnover rate represents activity by the Master Series that
was audited by other auditors.
PROSPECTUS 2
<PAGE> 11
DESCRIPTION OF THE FUNDS
GENERAL
The Trust is a "series fund," which is a mutual fund divided into separate
portfolios. Each portfolio is treated as a separate entity for certain matters
under the Investment Company Act of 1940, as amended (the "1940 Act"), and for
other purposes, and a shareholder of one portfolio is not deemed to be a
shareholder of any other portfolio. Each LifePath Fund is comprised of two
classes of shares -- Retail Class and Institutional Class. As described below,
for certain matters Trust shareholders vote together as a group, as to others
they vote separately by portfolio, and, in certain instances, they vote by class
of shares within a portfolio. In addition, because of differences between the
fees and expenses borne by the Retail Class Shares and Institutional Class
Shares, the net asset value of the shares in these two classes will typically
differ. By this Prospectus, Retail Class Shares of five of the Trust's
portfolios are being offered -- LifePath 2000 Fund, LifePath 2010 Fund, LifePath
2020 Fund, LifePath 2030 Fund and LifePath 2040 Fund, each of which is
diversified. The Trust has established five other portfolios that are not
offered through this Prospectus. From time to time, other portfolios may be
established. See "General Information."
MASTER/FEEDER STRUCTURE
Each Fund is a feeder fund in a master/feeder structure, which means it
invests all of its assets in a separate Master Series of the Master Portfolio
with the same investment objective as such Fund. See "Investment Objectives" and
"Management Policies" below. The Master Portfolio is organized as a trust under
the laws of the State of Delaware. See "Management of the Funds." In addition to
selling its shares to a Fund, each Master Series may sell its shares to certain
other mutual funds or other qualified investors. Information regarding
additional options, if any, for investment in shares of the Master Series is
available from Stephens and may be obtained by calling 1-800-643-9691. The
expenses and, correspondingly, the returns of other investment options in the
Master Portfolio are expected to differ from those of the Funds.
The Board of Trustees believes that, if other investors invest their assets in
a Master Series of the Master Portfolio, certain economic efficiencies may be
realized with respect to such Master Series. For example, fixed expenses that
otherwise would have been borne solely by a Fund would be spread across a larger
asset base provided by more than one fund investing in the Master Series. The
Fund and other entities investing in that Master Series will each be liable for
all obligations of the Master Series. However, the risk of the Fund incurring
financial loss on account of such liability is limited to circumstances in which
both inadequate insurance exists and the Master Portfolio itself is unable to
meet its obligations. Accordingly, the Trust's Board of Trustees believes that
none of the Funds nor their shareholders will be adversely affected by reason of
investing their assets in a Master Series. However, if a mutual fund or other
investor withdraws its investment from such Master Series, the economic
efficiencies
3 PROSPECTUS
<PAGE> 12
(e.g., spreading fixed expenses across a larger asset base) that the Trust's
Board believes should be available through investment in the Master Series may
not be fully achieved. In addition, given the relatively novel nature of the
master/feeder structure, accounting and operational difficulties could result.
Each Master Series' investment objective and other fundamental policies, which
are the same as those of the Fund bearing the corresponding name, cannot be
changed without approval by the holders of a majority (as defined in the 1940
Act) of such Master Series' outstanding voting shares. Whenever a Fund, as a
Master Series shareholder, is requested to vote on matters pertaining to any
fundamental policy of such Master Series, the Fund will hold a meeting of its
shareholders to consider such matters and such Fund will cast its votes in
proportion to the votes received from Fund shareholders. A Fund will vote Master
Series shares for which it receives no voting instructions in the same
proportion as the votes received from Fund shareholders. In addition, certain
policies of the Master Series which are non-fundamental could be changed by vote
of a majority of the Master Portfolio's Trustees without shareholder vote. If a
Master Series' investment objective or fundamental or non-fundamental policies
are changed, the Fund investing in that Master Series could subsequently change
its objective or policies to correspond to those of the Master Series or the
Fund could redeem its Master Series shares and either seek a new investment
company in which to invest with a matching objective or retain its own
investment adviser to manage such Fund's portfolio in accordance with its
objective. In the latter case, the Fund's inability to find a substitute
investment company in which to invest or equivalent management services could
adversely affect shareholders' investments in that Fund. A Fund will provide
shareholders with 30 days' written notice prior to the implementation of any
change in a non-fundamental policy of such Fund or Master Series, to the extent
possible.
Each LifePath Fund is comprised of two classes of shares - Retail Class and
Institutional Class. The classes have identical rights with respect to the
series of which they are a part, except that there are certain matters which
affect one class but not another. Currently, the only such matter is the
existence of a Distribution Plan pursuant to Rule 12b-1 under the 1940 Act with
respect to the Retail Class but not the Institutional Class. On all such matters
the shareholders of the affected class vote as a class.
RISK FACTORS
The net asset value and investment return of each LifePath Fund and LifePath
Master Series are expected to fluctuate and are neither insured nor guaranteed.
To the extent that each LifePath Master Series holds both equity and
fixed-income securities, it is subject to equity market risk as well as credit
and interest rate risks. Equity market risk is the risk that common stock prices
will fluctuate or decline over short or even extended periods of time. Credit
risk is the risk that the issuer of a debt instrument is unable, due to
financial constraints, to make timely payments on its outstanding obligations.
Interest-rate risk is the risk that increases in market interest rates may
adversely affect the value of the debt instruments in which a Fund invests and
hence the value of an investment in
PROSPECTUS 4
<PAGE> 13
the Fund. The value of debt instruments held by a Fund generally changes
inversely to changes in market interest rates. Investments in foreign securities
can expose the Master Series to currency exchange risks and other potentially
adverse consequences associated with investing in securities markets that are
not as developed or efficient as those in the United States. Certain investment
techniques that may be used by the LifePath Master Series, such as investing in
stock index options, futures contracts and interest-rate swaps, present special
risk considerations. See "Appendix - Investment Techniques" beginning on page
A-8. As with all mutual funds, there can be no assurance that each Fund or
Master Series will achieve its investment objective. This summary of risk
factors is qualified by reference to more detailed descriptions of the risks
associated with an investment in the Funds, as set forth under "Risk
Considerations" beginning on page 12 below.
INVESTMENT OBJECTIVES
Each LifePath Fund seeks to provide long-term investors with an asset
allocation strategy designed to maximize assets for retirement or for other
purposes consistent with the quantitatively measured risk investors, on average,
may be willing to accept given their investment time horizons. Specifically:
- LifePath 2000 Fund is managed for investors planning to retire (or begin to
withdraw substantial portions of their investment) approximately in the year
2000.
- LifePath 2010 Fund is managed for investors planning to retire (or begin to
withdraw substantial portions of their investment) approximately in the year
2010.
- LifePath 2020 Fund is managed for investors planning to retire (or begin to
withdraw substantial portions of their investment) approximately in the year
2020.
- LifePath 2030 Fund is managed for investors planning to retire (or begin to
withdraw substantial portions of their investment) approximately in the year
2030.
- LifePath 2040 Fund is managed for investors planning to retire (or begin to
withdraw substantial portions of their investment) approximately in the year
2040.
Each Fund's investment objective cannot be changed without approval by the
holders of a majority (as defined in the 1940 Act) of such Fund's outstanding
voting securities. Each Master Series' investment objective, which is the same
as the corresponding Fund's, cannot be changed without approval by the holders
of a majority (as defined in the 1940 Act) of such Master Series' outstanding
voting shares. Shareholders of a Fund that invests in a Master Series are
provided the opportunity to vote on any proposed change to such Master Series'
investment objective, and that Fund will vote on any such proposal in proportion
to the votes received from Fund shareholders. See "General" above. The
differences in objectives and policies among the Master Series determine the
types of portfolio securities in which each Master Series invests and can be
expected to affect the degree of risk to which each Master Series, and,
therefore, the corresponding Fund, is subject and the yield or return of each
Master Series and Fund.
5 PROSPECTUS
<PAGE> 14
INTRODUCTION
Each Fund invests all of its assets in the Master Series bearing the
corresponding name, which has the same investment objective as such Fund. A Fund
may withdraw its investment in the relevant Master Series at any time, provided
that the Trust's Board of Trustees determines that it is in the best interests
of the Fund to do so. Upon any such withdrawal, the Trust's Board of Trustees
would consider what action should be taken, including investing all such Fund's
assets in another pooled investment entity having the same investment objective
as the Fund, or retaining an investment adviser to manage such Fund's assets in
accordance with the policies described below.
Since the investment characteristics of each Fund correspond directly with
those of the Master Series bearing the corresponding name, the following is a
discussion of the management policies used by each Master Series.
The LifePath Master Series are a diversified series of asset allocation funds
designed for long-term investors. The LifePath 2000 Master Series, LifePath 2010
Master Series, LifePath 2020 Master Series, LifePath 2030 Master Series and
LifePath 2040 Master Series follow an asset allocation strategy among three
broad investment classes: equity and debt securities of issuers located
throughout the world and cash in the form of money market instruments. Each
LifePath Master Series differs in the weighting assigned to each such investment
class, with the later-dated Master Series generally bearing more risk than the
earlier-dated Master Series, with the expectation of greater total return. Thus,
the investment class weightings of the LifePath 2040 Master Series initially
might be 100%, 0% and 0% among equity securities, debt securities and cash,
respectively, while the weightings of the LifePath 2000 Master Series initially
might be 25%, 50% and 25%, respectively. Over the years, each LifePath Master
Series is managed more conservatively, on the premise that individuals investing
for retirement desire to reduce investment risk in their retirement accounts as
they age. The difference in such investment class weightings is based on the
statistically determined risk that such investors, on average, may be willing to
accept given their investment time horizons in an effort to maximize assets in
anticipation of retirement or for other purposes.
You are encouraged to invest in a particular LifePath Fund based on the decade
of your anticipated retirement or when you anticipate beginning to withdraw
substantial portions of your account. For example, the LifePath 2000 Fund is
designed for investors in their 50s and 60s who plan to retire (or begin to
withdraw substantial portions of their investment) in approximately 2000; the
LifePath 2010 Fund is designed for investors in their 40s and 50s who plan to
retire (or begin to withdraw as described above) in approximately 2010; and so
on. In addition, when making your investment decision, you could consider
evaluating your own risk profile, recognizing, for example, that the LifePath
2040 Fund is designed for investors with a high tolerance for risk while the
LifePath 2000 Fund is designed for investors with a low tolerance for risk.
To manage the LifePath Master Series, WFNIA employs a proprietary investment
model (the "Model") that analyzes extensive financial and economic data,
including risk
PROSPECTUS 6
<PAGE> 15
correlation and expected return statistics, to recommend the portfolio
allocation among the investment classes described below. At its simplest, for
each point in time, the Model recommends a portfolio allocation designed to
maximize total return for each LifePath Master Series based on each such
LifePath Master Series' evolving risk profile. As a result, while each LifePath
Master Series invests in substantially the same securities within an investment
class, the amount of each LifePath Master Series' aggregate assets invested in a
particular investment class, and thus in particular securities, differs, but the
relative percentage that a particular security comprises within an investment
class ordinarily remains substantially the same. As of May 31, 1995 asset
allocations in the LifePath Master Series were approximately as follows:
<TABLE>
<CAPTION>
LIFEPATH LIFEPATH LIFEPATH LIFEPATH LIFEPATH
2040 2030 2020 2010 2000
MASTER MASTER MASTER MASTER MASTER
SERIES SERIES SERIES SERIES SERIES
-------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
Equity Securities ... 100% 80% 70% 50% 25%
Debt Securities ..... 0% 15% 25% 40% 50%
Cash ................ 0% 5% 5% 10% 25%
</TABLE>
WFNIA may in the future refine the Model, or the financial and economic data
analyzed by the Model, in ways that could result in changes to recommended
allocations.
The relative weightings for each LifePath Master Series of the various
investment classes are expected to change over time, with the LifePath 2040
Master Series adopting in the 2030s characteristics similar to the LifePath 2000
Master Series today.
MANAGEMENT POLICIES
LifePath Master Series
The LifePath Model contains both "strategic" and "tactical" components, with
the strategic component weighted more heavily than the tactical component. The
strategic component of the Model evaluates the risk that investors, on average,
may be willing to accept given their investment time horizons. The strategic
component thus determines the changing investment risk level of each LifePath
Fund as time passes. The tactical component of the Model, on the other hand,
addresses short-term market conditions. The tactical component thus adjusts the
amount of investment risk taken by each LifePath Fund without regard to time
horizon, but rather in consideration of the relative risk-adjusted short-term
attractiveness of various asset classes.
Through the strategic and tactical components the asset allocation strategy
contemplates shifts, which may be frequent, among a wide range of U.S. and
foreign investments and market sectors. Each LifePath Master Series may invest
up to approximately 20% of the value of its total assets in foreign securities
that are not publicly traded in the United States. Rather than choosing specific
securities, WFNIA selects indices representing segments of the global equity and
debt markets and invests
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to create market exposure to these market segments by purchasing representative
samples of securities comprising the indices in an attempt to replicate their
performance. From time to time, other indices may be selected in addition to, or
as a substitute for, any of the indices listed herein and market exposure may be
broadened. You will be notified of any such change.
WFNIA has broad latitude in selecting the class of investments and the
particular securities within a class in which each LifePath Master Series
invests. No LifePath Master Series is managed as a balanced portfolio nor is it
required to maintain a portion of its investments in each of its permitted
investment categories at all times. Until a LifePath Master Series attains an
asset level of approximately $100 to $150 million, WFNIA allocates assets across
fewer of the investment categories identified below than it otherwise would. As
a LifePath Master Series approaches this minimum asset level, WFNIA adds
investment categories from among those identified below, thereby approaching the
desired investment mix over time.
WFNIA compares each LifePath Master Series' investments from time to time to
the Model's recommended allocation. Recommended reallocations are implemented
subject to WFNIA's assessment of current economic conditions and investment
opportunities. WFNIA may change from time to time the criteria and methods it
uses to implement the recommendations of the Model. Any recommended reallocation
is implemented in accordance with trading policies designed to take advantage of
market opportunities and reduce transaction costs. The asset allocation mix
selected is a primary determinant in the respective LifePath Master Series'
investment performance.
Wells Fargo Bank and WFNIA manage other portfolios which also invest in
accordance with the Model. The performance of each of those other portfolios is
likely to vary among themselves and from the performance of each LifePath Master
Series and corresponding LifePath Fund. Such variation in performance is
primarily due to different equilibrium asset mix assumptions used for the
various portfolios, timing differences in the implementation of the Model's
recommendations and differences in expenses and liquidity requirements.
The LifePath Master Series may invest in up to 17 asset classes, including 10
stock classes, 6 bond classes and a money market class. Each LifePath Master
Series invests in the classes of investments described below in the following
manner:
EQUITY SECURITIES -- The LifePath Master Series seek U.S. equity market
exposure through the following indices of common stock:
- The S&P/BARRA Value Stock Index (consisting of primarily
large-capitalization U.S. stocks with lower-than-average price/book ratios).
- The S&P/BARRA Growth Stock Index (consisting of primarily
large-capitalization U.S. stocks with higher-than-average price/book
ratios).
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- The Intermediate Capitalization Value Stock Index (consisting of primarily
medium-capitalization U.S. stocks with lower-than-average price/book
ratios).
- The Intermediate Capitalization Growth Stock Index (consisting of primarily
medium-capitalization U.S. stocks with higher-than-average price/book
ratios).
- The Intermediate Capitalization Utility Stock Index (consisting of primarily
medium-capitalization U.S. utility stocks).
- The Micro Capitalization Market Index (consisting of primarily
small-capitalization U.S. stocks).
- The Small Capitalization Value Stock Index (consisting of primarily small-
capitalization U.S. stocks with lower-than-average price/book ratios).
- The Small Capitalization Growth Stock Index (consisting of primarily small-
capitalization U.S. stocks with higher-than-average price/book ratios).
The LifePath Master Series seek foreign equity market exposure through the
following indices of foreign equity securities:
- The Morgan Stanley Capital International (MSCI) Japan Index (consisting of
primarily large-capitalization Japanese stocks).
- The Morgan Stanley Capital International Europe, Australia, Far East Index
(MSCI EAFE) Ex-Japan Index (consisting of primarily large-capitalization
foreign stocks, excluding Japanese stocks).
In addition, each LifePath Master Series may invest in other common stocks,
preferred stocks and convertible securities, including those in the form of
American, European and Continental Depositary Receipts, as well as warrants to
purchase such securities, and investment company securities. See
"Appendix -- Portfolio Securities."
DEBT SECURITIES -- The LifePath Master Series seek U.S. debt market exposure
through the following indices of U.S. debt securities:
- The Lehman Brothers Long-Term Government Bond Index (consisting of all U.S.
Government bonds with maturities of at least ten years).
- The Lehman Brothers Intermediate-Term Government Bond Index (consisting of
all U.S. Government bonds with maturities of less than ten years and greater
than one year).
- The Lehman Brothers Long-Term Corporate Bond Index (consisting of all U.S.
investment-grade corporate bonds with maturities of at least ten years).
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- The Lehman Brothers Intermediate-Term Corporate Bond Index (consisting of
all U.S. investment-grade corporate bonds with maturities of less than ten
years and greater than one year).
- The Lehman Brothers Mortgage-Backed Securities Index (consisting of all
fixed-coupon mortgage pass-throughs issued by the Federal National Mortgage
Association, Government National Mortgage Association and Federal Home Loan
Mortgage Corporation with maturities greater than one year).
The LifePath Master Series seek foreign debt market exposure through the
following index of foreign debt securities:
- The Salomon Brothers Non-U.S. World Government Bond Index (consisting of
foreign government bonds with maturities of greater than one year).
Each U.S. and foreign debt security is expected to be part of an issuance with
a minimum outstanding amount at the time of purchase of approximately $50
million and $100 million, respectively. Each security in which a LifePath
Master Series invests must be rated at least Baa by Moody's Investors Service,
Inc. ("Moody's"), or BBB by Standard & Poor's Corporation ("S&P"), Fitch
Investors Service, Inc. ("Fitch") or Duff & Phelps, Inc. ("Duff") or, if
unrated, deemed to be of comparable quality by WFNIA. See "Risk
Considerations -- Fixed-Income Securities" below, and "Appendix" in the
Statement of Additional Information.
MONEY MARKET INSTRUMENTS -- The money market instrument portion of each Master
Series' portfolio generally is invested in high-quality money market
instruments, including U.S. Government obligations, obligations of domestic
and foreign banks, short-term corporate debt instruments and repurchase
agreements. See "Appendix" below for a more complete description of the money
market instruments in which each Master Series may invest.
INVESTMENT TECHNIQUES -- Each LifePath Master Series also may lend its
portfolio securities and enter into transactions in certain derivatives, each
of which involves risk. Derivatives are financial instruments whose values are
derived, at least in part, from the prices of other securities or specified
assets, indices or rates. The futures contracts and options on futures
contracts that each Master Series may purchase are considered derivatives.
Each Master Series may use some derivatives as part of its short-term
liquidity holdings and/or as substitutes for comparable market positions in
the underlying securities. Also, asset-backed securities issued or guaranteed
by U.S. Government agencies or instrumentalities and certain floating- and
variable-rate instruments can be considered derivatives. Some derivatives may
be more sensitive than direct securities to changes in interest rates or
sudden market moves. Some derivatives also may be susceptible to fluctuations
in yield or value due to their structure or contract terms.
PROSPECTUS 10
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Wells Fargo Bank (as investment adviser to each Master Series) and WFNIA (as
sub-adviser to each Master Series) use a variety of internal risk management
procedures to ensure that derivatives use is consistent with each Master
Series' and each Fund's investment objective, does not expose either the
Master Series or a Fund to undue risks and is closely monitored, including
providing periodic reports to the Boards of Trustees concerning the use of
derivatives. Derivatives use also is subject to broadly applicable investment
policies. For example, in no case may a Master Series invest more than 15% of
the current value of its assets in "illiquid securities," including
derivatives without active secondary markets. Nor may a Master Series use
derivatives to create leverage without establishing adequate "cover" in
compliance with Securities and Exchange Commission leverage rules. For more
information, see "Risk Considerations" below, and "Appendix -- Investment
Techniques."
CERTAIN FUNDAMENTAL POLICIES
Each Fund and Master Series may (i) borrow money to the extent permitted under
the 1940 Act; (ii) invest up to 5% of its total assets in the obligations of any
single issuer, except that up to 25% of the value of the total assets of such
Fund or Master Series may be invested and obligations issued or guaranteed by
the U.S. Government, its agencies or instrumentalities may be purchased, without
regard to any such limitation; and (iii) invest up to 25% of the value of its
total assets in the securities of issuers in a particular industry or group of
closely related industries, provided there is no limitation on the purchase of
obligations issued or guaranteed by the U.S. Government, its agencies or
instrumentalities. This paragraph describes fundamental policies that cannot be
changed as to a Fund or Master Series without approval by the holders of a
majority (as defined in the 1940 Act) of the outstanding voting securities of
such Fund or Master Series, as the case may be. See "Investment Objectives and
Management Policies -- Investment Restrictions" in the Statement of Additional
Information.
CERTAIN ADDITIONAL NON-FUNDAMENTAL POLICIES
Each Fund and Master Series may (i) purchase securities of any company having
less than three years' continuous operation (including operations of any
predecessors) if such purchase does not cause the value of its investments in
all such companies to exceed 5% of the value of its total assets; (ii) pledge,
hypothecate, mortgage or otherwise encumber its assets, but only to secure
permitted borrowings; and (iii) invest up to 15% of the value of its net assets
in repurchase agreements providing for settlement in more than seven days after
notice and in other illiquid securities. Although each LifePath Fund and
LifePath Master Series reserves the right to invest up to 15% of the value of
its net assets in illiquid securities, including repurchase agreements providing
for settlement in more than seven days after notice, as long as such Fund's
shares are registered for sale in a state that imposes a lower limit on the
percentage of a fund's assets that may be so invested, such LifePath Fund and
LifePath Master Series will comply with the lower limit. Each LifePath Fund
currently is limited to investing up to 10% of the value of its net assets in
such securities due to limits applicable in several
11 PROSPECTUS
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states. See "Investment Objectives and Management Policies -- Investment
Restrictions" in the Statement of Additional Information.
RISK CONSIDERATIONS
General
Since the investment characteristics and, therefore, investment risks directly
associated with such characteristics of each LifePath Fund correspond to those
of the Master Series in which such Fund invests, the following is a discussion
of the risks associated with an investment in the Master Series.
The net asset value per share of each LifePath Fund is not fixed and should be
expected to fluctuate.
Investment Techniques
Each LifePath Master Series may engage in various investment techniques the
use of which involves greater risk than that incurred by other funds with
similar investment objectives. See "Appendix -- Investment Techniques." Using
these techniques may affect the degree to which a LifePath Master Series' net
asset value fluctuates.
Equity Securities
You should be aware that equity securities fluctuate in value, often based on
factors unrelated to the value of the issuer of the securities, and that
fluctuations can be pronounced. Changes in the value of a LifePath Master
Series' portfolio securities result in changes in the value of such LifePath
Master Series' shares and thus the LifePath Master Series' yield and total
return to you.
The securities of the smaller companies in which each LifePath Master Series
may invest may be subject to more abrupt or erratic market movements than
larger, more-established companies, both because the securities typically are
traded in lower volume and because the issuers typically are subject to a
greater degree to changes in earnings and prospects.
Fixed-Income Securities
You should be aware that even though interest-bearing securities are
investments which promise a stable stream of income, the prices of such
securities are inversely affected by changes in interest rates and, therefore,
are subject to the risk of market price fluctuations. Long-term securities are
affected to a greater extent by interest rates than shorter-term securities. The
values of fixed-income securities also may be affected by changes in the credit
rating or financial condition of the issuing entities. Once the rating of a
portfolio security has been changed to a rating below investment grade, the
particular LifePath Master Series considers all circumstances deemed relevant in
determining whether to continue to hold the security. Certain securities that
may be purchased by the LifePath Master Series, such as those rated Baa by
Moody's and BBB by S&P, Fitch and Duff, may be subject to such risk with respect
to the issuing entity and to greater market fluctuations than certain lower
yielding, higher rated fixed-income securities. Securities which are rated Baa
by Moody's are considered medium-grade
PROSPECTUS 12
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obligations; they are neither highly protected nor poorly secured, and are
considered by Moody's to have speculative characteristics. Securities rated BBB
by S&P are regarded as having adequate capacity to pay interest and repay
principal, and while such debt securities ordinarily exhibit adequate protection
parameters, adverse economic conditions or changing circumstances are more
likely to lead to a weakened capacity to pay interest and repay principal for
securities in this category than in higher rated categories. Securities rated
BBB by Fitch are considered investment grade and of satisfactory credit quality;
however, adverse changes in economic conditions and circumstances are more
likely to have an adverse impact on these securities and, therefore, impair
timely payment. Securities rated BBB by Duff have below average protection
factors but nonetheless are considered sufficient for prudent investment. If a
security held by a LifePath Master Series is downgraded to a rating below
investment grade, such Master Series may continue to hold the security until
such time as WFNIA determines it advantageous for the LifePath Master Series to
sell the security. If such a policy would cause a LifePath Master Series to have
5% or more of its net assets invested in securities that have been downgraded
below investment grade, the Master Series promptly would seek to dispose of such
securities in an orderly manner. See "Appendix -- Portfolio
Securities -- Ratings" and "Appendix" in the Statement of Additional
Information.
Foreign Securities
Foreign securities markets generally are not as developed or efficient as
those in the United States. Securities of some foreign issuers are less liquid
and more volatile than securities of comparable U.S. issuers. Similarly, volume
and liquidity in most foreign securities markets are less than in the United
States and, at times, volatility of price can be greater than in the United
States. In addition, there may be less publicly available information about a
non-U.S. issuer, and non-U.S. issuers generally are not subject to uniform
accounting and financial reporting standards, practices and requirements
comparable to those applicable to U.S. issuers. See "Appendix -- Portfolio
Securities -- Bank Obligations."
Because evidences of ownership of such securities usually are held outside the
United States, each Master Series will be subject to additional risks which
include possible adverse political and economic developments, possible seizure
or nationalization of foreign deposits and possible adoption of governmental
restrictions which might adversely affect the payment of principal and interest
on the foreign securities or might restrict the payment of principal and
interest to investors located outside the country of the issuers, whether from
currency blockage or otherwise. Custodial expenses for a portfolio of non-U.S.
securities generally are higher than for a portfolio of U.S. securities.
Since the LifePath Master Series may purchase foreign securities in currencies
of foreign countries, the value of these assets as measured in U.S. dollars may
be affected favorably or unfavorably by changes in currency rates and exchange
control regulations.
13 PROSPECTUS
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Some currency exchange costs generally are incurred when a LifePath Master
Series changes investments from one country to another.
Furthermore, some of these securities may be subject to brokerage or stamp
taxes levied by foreign governments, which have the effect of increasing the
cost of such investment and reducing the realized gain or increasing the
realized loss on such securities at the time of sale. Income received by a
Master Series from sources within foreign countries may be reduced by
withholding and other taxes imposed by such countries. Tax conventions between
certain countries and the United States, however, may reduce or eliminate such
taxes. All such taxes paid by a Master Series reduce its net income available
for distribution to its shareholders.
Foreign Currency Exchange
Currency exchange rates may fluctuate significantly over short periods of
time. They generally are determined by the forces of supply and demand in the
foreign exchange markets and the relative merits of investments in different
countries, actual or perceived changes in interest rates and other complex
factors, as seen from an international perspective. Currency exchange rates also
can be affected unpredictably by the intervention of U.S. or foreign governments
or central banks, or by the failure to intervene, or by currency controls or
political developments in the United States or abroad. The LifePath Master
Series intend to engage in foreign currency transactions to maintain the same
foreign currency exposure as the relevant foreign securities index through which
the Master Series seek foreign equity market exposure, but not as part of a
defensive strategy to protect against fluctuations in exchange rates.
Foreign currency transactions may occur on a spot (i.e., cash) basis at the
rate prevailing in the currency exchange market or on a forward basis. A forward
currency exchange contract involves an obligation to purchase or sell a specific
currency at a set price on a future date which must be more than two days from
the date of the contract. The forward foreign currency market offers less
protection against default than is available when trading currencies on an
exchange, since a forward currency contract is not guaranteed by an exchange or
clearinghouse. Therefore, a default on a forward currency contract would deprive
the LifePath Master Series of unrealized profits or force such Master Series to
cover its commitments for purchase or resale, if any, at the current market
price.
Foreign Futures Transactions
Unlike trading on domestic futures exchanges, trading on foreign futures
exchanges is not regulated by the Commodity Futures Trading Commission (the
"CFTC") and generally is subject to greater risks than trading on domestic
exchanges. For example, some foreign exchanges are principal markets so that no
common clearing facility exists and an investor may look only to the broker for
performance of the contract. WFNIA, however, considers on an ongoing basis the
creditworthiness of such counterparties. In addition, any profits that a
LifePath Master Series might realize in trading could be eliminated by adverse
changes in the exchange rate; adverse exchange rate changes also
PROSPECTUS 14
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could cause a Master Series to incur losses. Transactions on foreign exchanges
may include both futures contracts which are traded on domestic exchanges and
those which are not.
Other Investment Considerations
Asset allocation and modeling strategies are employed by Wells Fargo Bank and
WFNIA for other investment companies and accounts advised or sub-advised by
Wells Fargo Bank or WFNIA. If these strategies indicate particular securities
should be purchased or sold, at the same time, by a LifePath Master Series and
one or more of these investment companies or accounts, available investments or
opportunities for sales will be allocated equitably to each by Wells Fargo Bank
or WFNIA. In some cases, this procedure may adversely affect the size of the
position obtained for or disposed of by a LifePath Master Series or the price
paid or received by such LifePath Master Series.
Under normal market conditions, the portfolio turnover rate for each LifePath
Master Series is not expected to exceed 100%. A portfolio turnover rate of 100%
would occur, for example, if all of a LifePath Master Series' securities were
replaced within one year. Higher portfolio turnover rates are likely to result
in comparatively greater brokerage commissions. In addition, short-term gains
realized from portfolio transactions are taxable to shareholders as ordinary
income. Portfolio turnover will not be a limiting factor in making investment
decisions.
MANAGEMENT OF THE FUNDS
GENERAL
The Trust has not retained the services of an investment adviser because each
Fund's assets are invested in a Master Series that has retained investment
advisory services (see "Master Series Investment Adviser and Sub-Investment
Adviser" below).
BOARD OF TRUSTEES
The business and affairs of the Trust are managed under the direction of its
Board of Trustees. The Trust's Trustees are also the Master Portfolio's
Trustees. The Trust's Board, including a majority of the Trustees who are not
"interested persons" (as that term is defined in the 1940 Act) of the Trust, has
adopted procedures to address potential conflicts of interest that may arise as
a result of the structure of the Boards. See "Management of the Trust" in the
Statement of Additional Information. The Statement of Additional Information
also contains the name and general business experience of each Trustee.
MASTER SERIES INVESTMENT ADVISER AND SUB-INVESTMENT ADVISER
Wells Fargo Bank, a wholly owned subsidiary of Wells Fargo & Company located
at 420 Montgomery Street, San Francisco, California 94105, is each Master
Series' investment adviser. Wells Fargo Bank, one of the ten largest banks in
the United States, was founded in 1852 and is the oldest bank in the western
United States. As of March 31, 1995, various divisions and affiliates of Wells
Fargo Bank (including WFNIA) provided
15 PROSPECTUS
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investment advisory services for approximately $196 billion of assets of
individuals, trusts, estates and institutions. Pursuant to an Investment
Advisory Agreement with the Master Portfolio, Wells Fargo Bank provides
investment guidance and policy direction in connection with the management of
each Master Series' assets, subject to the supervision of the Master Portfolio's
Board of Trustees and in conformity with Delaware law and the stated policies of
such Master Series.
Wells Fargo Bank has engaged WFNIA, located at 45 Fremont Street, San
Francisco, California 94105, to provide sub-investment advisory services to each
Master Series. WFNIA is a general partnership owned 50% by a wholly owned
subsidiary of Wells Fargo Bank and 50% by a subsidiary of The Nikko Securities
Co., Ltd. WFNIA is responsible for managing or providing investment advice for
assets aggregating in excess of $171 billion as of March 31, 1995. Pursuant to a
Sub-Investment Advisory Agreement, WFNIA, subject to the supervision and
approval of Wells Fargo Bank, provides investment advisory assistance and the
day-to-day management of each Master Series' assets, subject to the overall
authority of the Master Portfolio's Board of Trustees and in conformity with
Delaware law and the stated policies of such Master Series.
On June 21, 1995, Wells Fargo & Co. and The Nikko Securities Co., Ltd. signed
a definitive agreement to sell their joint venture interest in WFNIA to Barclays
PLC of the U.K. The sale, which is subject to the approval of appropriate
regulatory authorities, is expected to close in the fourth quarter of 1995.
Barclays is the largest clearing bank in the U.K., with $259 billion in total
assets. Barclays has announced its intention to combine WFNIA with the
quantitative group of BZW Asset Management ("BZWAM"), its international asset
management arm. BZWAM is the largest quantitative fund manager in Europe, with
approximately $32 billion of quantitative funds under management, as of March
31, 1995. The BZW Division of Barclays, of which BZWAM forms a part, is the
investment banking arm of Barclays and offers a full range of investment
banking, capital markets and asset management services.
Under the 1940 Act, this proposed change of control of WFNIA would result in
an assignment and termination of the current Sub-Investment Advisory Agreement
between WFNIA, Wells Fargo Bank and the Master Series. Subject to the approval
of the applicable Boards of Trustees of the Master Portfolio or the Trust, it is
contemplated that special meetings of shareholders of the Master Series and the
corresponding Funds will be convened to consider a new Sub-Investment Advisory
Agreement with WFNIA, which will become effective only upon the change of
control of WFNIA. It is not anticipated that the proposed change of control will
change the investment objective or overall investment strategy of the
Funds/Master Series.
Wells Fargo Bank deals, trades and invests for its own account in the types of
securities in which the Master Series may invest and may have deposit, loan and
commercial banking relationships with the issuers of securities purchased by a
Master Series. Wells
PROSPECTUS 16
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Fargo Bank has informed the Master Portfolio that in making its investment
decisions it does not obtain or use material inside information in its
possession.
Under the terms of the Investment Advisory Agreement, the Master Portfolio has
agreed to pay a monthly fee at the annual rate of 0.55% of each LifePath Master
Series' average daily net assets. Out of its fees received from the Master
Portfolio, Wells Fargo Bank has agreed to pay WFNIA a monthly fee at the annual
rate of 0.40% of each LifePath Master Series' average daily net assets. For the
fiscal year ended February 28, 1995, the Master Portfolio paid fees of 0.55%
with respect to each LifePath Master Series' average daily net assets,
respectively, to Wells Fargo Bank for its advisory services. Each LifePath Fund
bears a pro rata portion of the fees paid to the corresponding Master Series.
Out of its advisory fees, Wells Fargo Bank paid fees of 0.40% with respect to
each LifePath Master Series' average daily net assets, respectively, to WFNIA
for its sub-investment advisory services for the same period.
ADMINISTRATOR AND DISTRIBUTOR
Stephens, located at 111 Center Street, Little Rock, Arkansas 72201, serves as
the Trust's administrator pursuant to an Administration Agreement with the
Trust. Under the Administration Agreement, Stephens generally supervises all
aspects of the operation of the Trust other than providing investment advice,
subject to the overall authority of the Board of Trustees in accordance with
Massachusetts law. The administrative services provided to the LifePath Funds
also include coordination of the other services provided to the LifePath Funds,
compilation of information for reports to the Securities and Exchange Commission
and state securities commissions, preparation of proxy statements and
shareholder reports, and general supervision of data compilation in connection
with preparing periodic reports to the Trust's Board of Trustees and officers.
Stephens also furnishes office space and certain facilities to conduct the
Trust's business and compensates the Trust's Trustees, officers and employees
who are affiliated with Stephens. In addition, except as noted below, Stephens
has assumed all ordinary expenses incurred by a LifePath Fund other than the
fees payable by such Fund pursuant to the Trust's various service contracts. For
providing administrative services to the Trust, the Trust has agreed to pay
Stephens a monthly fee at the annual rate of 0.10% of each LifePath Fund's
average daily net assets. For the fiscal year ended February 28, 1995, the Trust
paid Stephens a monthly fee of 0.10% with respect to each LifePath Fund's
average daily net assets.
Stephens also serves as the Trust's principal underwriter within the meaning
of the 1940 Act and as distributor of each Fund's shares pursuant to a
Distribution Agreement with the Trust. The Distribution Agreement provides that
Stephens acts as agent for the Trust for the sale of Fund shares and may enter
into Selling Agreements with Selling Agents that wish to make available shares
of the Funds to their respective customers. The Funds may participate in joint
distribution activities with any of the other funds of the Company, in which
event expenses reimbursed out of the assets of the Fund may be attributable, in
part, to the distribution-related activities of another fund of the Company.
17 PROSPECTUS
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Generally, the expenses attributable to joint distribution activities are
allocated among each Fund and the other funds of the Company in proportion to
their relative net asset sizes, although the Company's Board of Directors may
allocate such expenses in any other manner that it deems fair and equitable.
Under the Distribution Agreement, Stephens is entitled to receive from each
Fund a monthly fee at an annual rate of up to 0.25% of the average daily net
assets of the Retail Shares of the Fund. Through Selling Agreements Stephens may
compensate Selling Agents for sales support services relating to the Retail
Class, including, but not limited to, commissions or other payments to such
agents based on the average daily net assets of Fund shares attributable to
them. Services provided by selling agents in exchange for payments to selling
agents are the principal sales support services provided to the Fund relating to
the Retail Class. Stephens may retain any portion of the total distribution fee
payable under the Distribution Agreement to compensate it for
distribution-related services provided by it or to reimburse it for other
distribution-related expenses. Since the Distribution Agreement provides for
fees that are used by Stephens to pay for distribution expenses, a plan of
distribution for the Retail Class of each Fund (a "Distribution Plan") and the
Distribution Agreement are approved and reviewed in accordance with Rule 12b-1
under the 1940 Act, which regulates the manner in which an investment company
may, directly or indirectly, bear the expense of distributing its shares.
Financial institutions acting as Selling Agents, Shareholder Servicing Agents,
or in certain other capacities may be required to register as dealers pursuant
to applicable state securities laws which may differ from federal law and any
interpretations expressed herein.
Stephens is a full service broker/dealer and investment advisory firm.
Stephens and its predecessor have been providing securities and investment
services for more than 60 years, including discretionary portfolio management
services since 1983. Stephens currently manages investment portfolios for
pension and profit sharing plans, individual investors, foundations, insurance
companies and university endowments.
CUSTODIAN AND TRANSFER AGENT
Wells Fargo Institutional Trust Company, N.A., 45 Fremont Street, San
Francisco, California 94105 ("WFITC") is the Master Portfolio's Custodian but
does not receive a fee from the Master Portfolio for such services. WFITC is
owned by WFNIA and Wells Fargo & Company. Wells Fargo Bank serves as the Trust's
custodian and also is the Trust's Transfer and Dividend Disbursing Agent (the
"Transfer Agent"). The Trust has agreed to pay Wells Fargo Bank, which provides
transfer agency services at 525 Market Street, San Francisco, California 94105,
a monthly fee at the annual rate of 0.10% of each Fund's average daily net
assets for transfer agency services.
PROSPECTUS 18
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SHAREHOLDER SERVICING PLAN
The Trust has adopted a Shareholder Servicing Plan pursuant to which it may
enter into Shareholder Servicing Agreements with certain financial institutions,
securities dealers and other industry professionals (collectively, "Shareholder
Servicing Agents") for the provision of certain services to Fund shareholders.
The services provided may include personal services relating to shareholder
accounts, such as answering shareholder inquiries regarding the Funds, providing
reports and other information, and providing services related to the maintenance
of shareholder accounts. For the services provided pursuant to a Shareholder
Servicing Agreement, the Trust may pay each Shareholder Servicing Agent a
monthly fee at the annual rate of up to 0.20% of the average daily value of each
LifePath Fund's shares beneficially owned by customers of the Shareholder
Servicing Agent. The fee payable for such services is intended to be a "service
fee" as defined in Article III, Section 26 of the NASD Rules of Fair Practice.
To date the Trust has entered into a Shareholder Servicing Agreement with Wells
Fargo Bank.
The Trust understands that a Shareholder Servicing Agent also may impose
certain conditions on its customers, subject to the terms of this Prospectus, in
addition to or different from those imposed by the Trust, such as requiring a
minimum initial investment or payment of a separate fee for additional services.
Each Shareholder Servicing Agent is required to agree to disclose any fees it
may directly charge its customers who are Fund shareholders and to notify them
in writing at least 30 days before it imposes any transaction fees.
EXPENSES
Under the Administration Agreement, Stephens has agreed to assume the
operating expenses of each LifePath Fund and a pro rata share of the operating
expenses of each LifePath Master Series, except for extraordinary expenses and
those fees and expenses payable pursuant to the various service contracts
described above which are borne by the Trust and those expenses specifically
assumed by Wells Fargo Bank under its contracts with the Funds. The initial term
of the Administration Agreement runs to October 25, 1996; thereafter, it
continues for successive one-year periods, subject to approval by the Trust's
Board of Trustees. For the fiscal year ended February 28, 1995, the operating
expenses for the Retail Shares of each of the LifePath Funds were 1.20% of the
average daily net assets of each of the LifePath Funds, respectively.
Stephens has not assumed the following operating expenses of the LifePath
Master Series: advisory fees, interest, brokerage fees and commissions, if any,
costs of independent pricing services and any extraordinary expenses.
Stephens has not assumed the following operating expenses of the LifePath
Funds: administration fees, Shareholder Servicing Agent fees, Transfer Agent
fees and expenses and any extraordinary expenses.
19 PROSPECTUS
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HOW TO BUY SHARES
GENERAL
You may purchase Retail Shares in one of the several ways described below. You
must complete and sign an Account Application to open an account. Additional
documentation may be required from corporations, associations and certain
fiduciaries. Do not mail cash. For more information or additional forms, call
1-800-222-8222. The Trust or Stephens may make the Prospectus available in an
electronic format. Upon receipt of a request from you or your representative,
the Trust or Stephens will transmit or cause to be transmitted promptly, without
charge, a paper copy of the electronic Prospectus.
To invest in a Fund's Retail Shares through a tax-deferred retirement plan
through which such Fund's Retail Shares are available, please contact a
Shareholder Servicing Agent to receive information and an application. See
"Tax-Deferred Retirement Plans" below.
The minimum initial investment is $100 by the AutoSaver Plan purchase method
(described below), $250 for any tax-deferred retirement account for which a
Shareholder Servicing Agent serves as trustee under a prototype trust approved
by the Internal Revenue Service ("IRS") (a "Plan Account"), and $1,000 by all
other methods or for all other investors. All subsequent investments must be at
least $100, except for Plan Accounts. All investments in a Fund's shares are
subject to a determination by the Trust that the investment instructions are
complete. Payment for shares purchased through a Selling Agent is not due from
the Selling Agent until the settlement date, which is normally three Business
Days after the order is placed. If shares are purchased by a check which does
not clear, the Trust reserves the right to cancel the purchase and hold the
investor responsible for any losses or fees incurred. The Trust reserves the
right in its sole discretion to suspend the availability of any Fund's shares
and to reject any purchase requests. Certificates for Fund shares are not
issued.
Shares of each Fund are sold on a continuous basis at the net asset value per
share next determined after an order in proper form is received by the Transfer
Agent. Net asset value per share is determined as of the close of regular
trading on the New York Stock Exchange ("NYSE") (currently 4:00 p.m., New York
time), on each day the NYSE is open for business (a "Business Day"). Currently,
the weekdays on which the NYSE is closed are: New Year's Day, Presidents' Day,
Good Friday, Memorial Day, Independence Day, Labor Day, Thanksgiving Day and
Christmas Day.
The net asset value of a share of each class of the LifePath Funds is the
value of total net assets attributable to such class divided by the number of
outstanding shares of that class. The value of the net assets per class is
determined daily by adjusting the net assets per class at the beginning of the
day by the value of each class's shareholder activity, net investment income and
net realized and unrealized gains or losses for that day. Net
PROSPECTUS 20
<PAGE> 29
investment income is calculated each day for each class by attributing to each
class a pro rata share of daily income and common expenses, and by assigning
class-specific expenses to each class as appropriate. The net asset value of
each class of shares is expected to fluctuate daily and is expected to differ.
The Master Series' investments are valued each Business Day generally by using
available market quotations or at fair value determined in good faith by the
investment adviser or sub-adviser pursuant to guidelines approved by the Master
Portfolio's Board of Trustees. For further information regarding the methods
employed in valuing each Master Series' investments, see "Determination of Net
Asset Value" in the Statement of Additional Information.
Purchase orders that are received by the Transfer Agent before the close of
regular trading on the NYSE generally are executed on the same day. Orders
received by the Transfer Agent after the close of regular trading on the NYSE
are executed on the next Business Day.
Federal regulations require that an investor provide a certified taxpayer
identification number ("TIN") upon opening or reopening an account. See
"Dividends, Distributions and Taxes" for further information concerning this
requirement. Failure to furnish a certified TIN to the Trust could subject the
investor to a $50 penalty imposed by the IRS.
You may buy Fund shares on any Business Day by any of the methods described
below.
INITIAL PURCHASES BY WIRE
1. Telephone toll free 1-800-222-8222. Give the name of the Fund in which an
investment is being made, and the name(s) in which the shares are to be
registered, address, TIN, amount to be wired, name of the wiring bank and
name and telephone number of the person to be contacted in connection with
the order. Some banks may impose wiring fees.
2. Instruct the wiring bank to transmit the specified amount in federal funds
($1,000 or more) to:
Wells Fargo Bank, N.A.
San Francisco, California
Bank Routing Number: 121000248
Wire Purchase Account Number: 4068-000587
Attention: Stagecoach Funds (Name of Fund -- Retail Class)
Account Name(s): (name(s) in which to be registered)
Account Number: (if investing into an existing account)
21 PROSPECTUS
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3. A completed Account Application should be mailed, or sent by telefacsimile
with the original subsequently mailed, to the following address immediately
after the funds are wired and must be received and accepted by the Transfer
Agent before an account can be opened:
Wells Fargo Bank, N.A.
Stagecoach Shareholder Services
P.O. Box 7033
San Francisco, California 94120-9517
Telefacsimile: 1-415-543-9538
4. Share purchases are effected at the net asset value next determined after the
Account Application is received and accepted.
INITIAL PURCHASES BY MAIL
1. Complete an Account Application. Indicate the services to be used.
2. Mail the Account Application and a check for $1,000 or more, payable to
"Stagecoach Funds/(Name of Fund -- Retail Class)," to the address above.
AUTOSAVER PLAN
The Trust's AutoSaver Plan provides you with a convenient way to establish and
automatically add to a Fund account on a monthly basis. To participate in the
AutoSaver Plan, you must specify an amount ($100 or more) to be withdrawn
automatically by the Transfer Agent on a monthly basis from an account with a
bank, which is designated in your Account Application and which is approved by
the Transfer Agent ("Approved Bank"). Wells Fargo Bank is an Approved Bank. The
Transfer Agent withdraws and uses this amount to purchase Fund shares on your
behalf on or about the fifth Business Day of each month. There are no separate
fees charged to you by the Trust for participating in the AutoSaver Plan.
You may change your investment amount, suspend purchases or terminate
participation in the Auto Saver Plan at any time by providing written notice to
the Transfer Agent at least five Business Days prior to any scheduled
transaction. Participation in the AutoSaver Plan will be terminated
automatically if an Approved Bank account balance is insufficient to make a
scheduled withdrawal, or if either the Approved Bank account or Fund account is
closed.
TAX-DEFERRED RETIREMENT PLANS
You may be entitled to invest in Shares of a Fund through a tax-deferred
retirement plan. Contact a Shareholder Servicing Agent for materials describing
plans available through it, and their benefits, provisions and fees related to
such plans. The minimum initial amount for Fund Shares acquired through a plan
is $250.
Pursuant to the Internal Revenue Code of 1986, as amended (the "Code"),
individuals who are not active participants (and who do not have a spouse who is
an active participant) in certain types of retirement plans ("qualified
retirement plans") may
PROSPECTUS 22
<PAGE> 31
deduct contributions to an individual retirement account ("IRA"), up to
specified limits. Investment earnings in the IRA will be tax-deferred until
withdrawn, at which time the individual may be in a lower tax bracket.
The maximum annual deductible contribution to an IRA for individuals under age
seventy and a half is 100% of includible compensation up to a maximum of (i)
$2,000 for single individuals; (ii) $4,000 for a married couple when both
spouses earn income; and (iii) $2,250 when one spouse earns, or elects for IRA
purposes to be treated as earning, no income (together the "IRA contribution
limits").
The IRA deduction is also available for single individual taxpayers and
married couples who are active participants in qualified retirement plans but
who have adjusted gross incomes which do not exceed certain specified limits. If
their adjusted gross income exceeds these limits, the amount of the deductible
contribution may be phased down and eventually eliminated.
Any individual who works may make nondeductible contributions to an IRA in
addition to any deductible contributions. Total aggregate deductible and
nondeductible contributions are limited to the IRA contribution limits discussed
above. Nondeductible contributions in excess of the applicable IRA contribution
limits are "nondeductible excess contributions." In addition, contributions made
to an IRA for the year in which an individual attains the age of seventy and a
half, or any year thereafter, are also nondeductible excess contributions.
Nondeductible excess contributions are subject to a 6% excise tax penalty which
is charged each year that the nondeductible excess contribution remains in the
IRA.
An employer also may contribute to an individual's IRA by establishing a
Simplified Employee Pension Plan through a Shareholder Servicing Agent, known as
a SEP-IRA. Participating employers may make an annual contribution in an amount
up to the lesser of 15% of earned income or $22,500, subject to certain
provisions of the Code. Investment earnings will be tax-deferred until
withdrawn.
The foregoing discussion regarding IRAs is based upon the Code and regulations
in effect as of the date of this Prospectus and summarizes only some of the
important federal tax considerations generally affecting IRA contributions made
by individuals or their employers. It is not intended as a substitute for
careful tax planning. You should consult your tax advisor with respect to your
specific tax situation as well as with respect to state and local taxes. Further
tax-related information is available in the "Dividends, Distributions and Taxes"
section of this Prospectus and in the Statement of Additional Information.
A Shareholder Servicing Agent also may offer other types of tax-deferred or
tax-advantaged plans, including a Keogh retirement plan for self-employed
professional persons, sole proprietors and partnerships.
Shares of each Fund also are offered to employee benefits plans, including,
but not limited to, retirement plans ("Benefit Plans"), that have appointed one
of the Trust's
23 PROSPECTUS
<PAGE> 32
Shareholder Servicing Agents as such plan's trustee or investment manager ("Plan
Trustee"). Benefit Plans include plans qualified under Section 401(a) of the
Code ("Qualified Plans"). Other Benefit Plans that are eligible to invest in
Fund shares include health and welfare plans and certain executive deferred
compensation plans. For additional information about Benefit Plans that may be
eligible to invest in Fund shares, prospective investors should contact a
Shareholder Servicing Agent.
Application materials for opening a tax-deferred retirement plan can be
obtained from a Shareholder Servicing Agent. Completed tax-deferred retirement
plan applications should be returned to the investor's Shareholder Servicing
Agent for approval and processing. If an investor's tax-deferred retirement plan
application is incomplete or improperly filled out, there may be a delay before
the Fund account is opened. Certain features described herein, such as the
AutoSaver Plan, may not be available to individuals or entities who invest
through a tax-deferred retirement plan. Investors should consult their
Shareholder Servicing Agent.
ADDITIONAL PURCHASES
You may make additional purchases of $100 or more by instructing the Fund's
Transfer Agent to debit a designated Approved Bank account by wire by using the
procedures described under initial purchases by wire, above, or by mail with a
check payable to "Stagecoach Funds/(Name of Fund -- Retail Class)" to the above
address. You must write your Fund account number on the check and include the
detachable stub from your Statement of Account or a letter providing your Fund
account number.
PURCHASES THROUGH SELLING AGENTS
You may place a purchase order for shares of the Funds through a broker/dealer
or financial institution which has entered into a Selling Agreement with
Stephens, as the Funds' Distributor ("Selling Agent").
If your purchase order is placed by the close of trading on the NYSE, the
purchase order generally is executed on the same day if the order is received by
the Transfer Agent before the close of business. If your purchase order is
received by a Selling Agent after the close of trading on the NYSE or by the
Transfer Agent after the close of business, then your purchase order is executed
on the next Business Day. Because payment for shares is not due until settlement
date, normally three Business Days after your order is placed, the Selling Agent
might benefit from temporary use of your payment.
The Selling Agent is responsible for the prompt transmission of your purchase
order to the Funds. A financial institution acting as a Selling Agent,
Shareholder Servicing Agent or in certain other capacities may be required to
register as a dealer pursuant to applicable state securities laws, which may
differ from federal law and any interpretations expressed herein.
PURCHASES THROUGH SHAREHOLDER SERVICING AGENTS
Purchase orders for Fund shares may be transmitted to the Transfer Agent
through a Shareholder Servicing Agent, such as Wells Fargo Bank.
PROSPECTUS 24
<PAGE> 33
The Shareholder Servicing Agent may transmit a purchase order to the Transfer
Agent, on your behalf, including a purchase order for which payment is to be
transferred from an account with an Approved Bank or wired from a financial
institution. If your order is transmitted by the Shareholder Servicing Agent, on
your behalf, to the Transfer Agent before the close of trading on the NYSE, the
purchase order generally is executed on the same day. If your Shareholder
Servicing Agent transmits your purchase order to the Transfer Agent after the
close of trading on the NYSE, then the order is executed on the next Business
Day following the day your order is received. The Shareholder Servicing Agent is
responsible for the prompt transmission of your purchase order to the Transfer
Agent.
HOW TO REDEEM SHARES
GENERAL
You may redeem all or a portion of your Retail Shares on any Business Day
without any charge by the Trust. The redemption price of the shares is the next
determined net asset value of the relevant Fund calculated after the Trust has
received a redemption request in proper form. Redemption proceeds may be more or
less than the amount invested depending on the relevant Fund's net asset value
at the time of purchase and redemption.
The Trust remits redemption proceeds from a Fund within seven days after a
redemption order is received in proper form, absent extraordinary circumstances.
Such extraordinary circumstances could include a period during which an
emergency exists as a result of which (a) disposal by the Master Series in which
such Fund invests of securities owned by the Master Series is not reasonably
practicable or (b) it is not reasonably practicable for the Fund fairly to
determine the value of its net assets, or a period during which the Securities
and Exchange Commission by order permits deferral of redemptions for the
protection of Fund shareholders. In addition, the Trust may defer payment of a
shareholder's redemption until reasonably satisfied that such shareholder's
investments made by check have been collected (which can take up to 15 days from
the purchase date). Payment of redemption proceeds may be made in portfolio
securities, subject to regulation by some state securities commissions.
Telephone redemption or exchange privileges are made available to shareholders
automatically upon opening an account, unless the shareholder declines the
privileges. These privileges authorize the Transfer Agent to act on telephone
instructions from any person representing himself or herself to be the investor
and reasonably believed by the Transfer Agent to be genuine. The Trust requires
the Transfer Agent to employ reasonable procedures, such as requiring a form of
personal identification, to confirm that instructions are genuine and, if it
does not follow such procedures, the Trust or the Transfer Agent may be liable
for any losses due to unauthorized or fraudulent instructions. Neither the Trust
nor the Transfer Agent will be liable for following telephone instructions
reasonably believed to be genuine.
25 PROSPECTUS
<PAGE> 34
During times of drastic economic or market conditions you may experience
difficulty in contacting the Transfer Agent by telephone to request a redemption
or exchange of Fund shares. In such cases, you should consider using the other
redemption procedures made available to you. Use of these other redemption
procedures may result in your redemption request being processed at a later time
than it would have been if telephone redemption had been used. During the delay,
a LifePath Fund's net asset value may fluctuate.
Due to the high cost of maintaining Fund accounts with small balances, the
Trust reserves the right to close an investor's account and send the proceeds to
such investor if the balance falls below $1,000 because of a redemption
(including a redemption of Fund shares after an investor has made only the
$1,000 minimum initial investment). However, investors will be given 30 days'
notice to make an additional investment to increase their account balance to
$1,000 or more. Plan Accounts are not subject to minimum Fund account balance
requirements.
Redemption orders that are received by the Transfer Agent before the close of
regular trading on the NYSE generally are executed at the net asset value
determined as of the close of regular trading on the NYSE on that day.
Redemption orders that are received by the Transfer Agent after the close of
trading on the NYSE are executed on the next Business Day.
REDEMPTIONS BY MAIL
1. Write a letter of instruction. Indicate the dollar amount or number of Fund
shares to be redeemed, the Fund account number and TIN.
2. Sign the letter in exactly the same way the account is registered. If there
is more than one owner of the shares, all owners must sign.
3. If shares to be redeemed have a value of $5,000 or more, or redemption
proceeds are to be paid to someone other than you at your address of
record, the signature(s) must be guaranteed by an "eligible guarantor
institution," which generally includes a commercial bank whose deposits are
insured by the Federal Deposit Insurance Corporation ("FDIC"), a trust
company, a member firm of a domestic stock exchange, a savings association,
or a credit union that is authorized by its charter to provide a signature
guarantee. Signature guarantees by notaries public are not acceptable.
Further documentation may be requested from corporations, administrators,
executors, personal representatives, trustees or custodians.
4. Mail the redemption letter to the Transfer Agent at the mailing address set
forth under "How to Buy Shares - Initial Purchases By Wire."
Unless other instructions are given in proper form, a check for the redemption
proceeds is sent to your address of record.
PROSPECTUS 26
<PAGE> 35
SYSTEMATIC WITHDRAWAL PLAN
The Systematic Withdrawal Plan provides you with a convenient way to have Fund
shares redeemed from your account and the proceeds distributed to you on a
monthly basis. You may participate in the Systematic Withdrawal Plan only if you
have a Fund account valued at $10,000 or more as of the date of your election to
participate, you have an account at an Approved Bank, your dividends and capital
gain distributions are being reinvested automatically, and you are not
participating in the AutoSaver Plan at any time while participating in the
Systematic Withdrawal Plan. You may specify an amount ($100 or more) to be
distributed by check to your address of record or deposited in the Approved Bank
account designated in your Account Application. The Transfer Agent redeems
sufficient shares and mails or deposits redemption proceeds as instructed on or
about the fifth Business Day prior to the end of each month. There are no
separate fees charged to you by the Fund for participating in the Systematic
Withdrawal Plan.
You may change your withdrawal amount, suspend withdrawals or terminate your
participation in the Systematic Withdrawal Plan at any time by providing written
notice to the Transfer Agent at least five Business Days prior to any scheduled
transaction. Your participation in the Systematic Withdrawal Plan is terminated
automatically if your Fund account balance is insufficient to make a scheduled
withdrawal or if your Fund account or Approved Bank account is closed.
EXPEDITED REDEMPTIONS BY LETTER AND TELEPHONE
You may request an expedited redemption of Fund shares by letter, in which
case your receipt of redemption proceeds, but not the Fund's receipt of your
redemption request, would be expedited. Telephone redemption or exchange
privileges are made available to you automatically upon the opening of an
account unless you decline the privilege. You also may request an expedited
redemption of Fund shares by telephone on any Business Day, in which case both
your receipt of redemption proceeds and the Fund's receipt of your redemption
request would be expedited.
Telephone your expedited redemption request to the Transfer Agent at
1-800-222-8222;
or:
Mail your expedited redemption request to the Transfer Agent at the mailing
address set forth under "How to Buy Shares - Initial Purchases by Wire."
Upon request, proceeds of expedited redemptions of $5,000 or more are wired or
credited to the Approved Bank account designated in the Account Application. The
Trust reserves the right to impose a charge for wiring redemption proceeds. When
proceeds of your expedited redemption are to be paid to someone else, to an
address other than that of record, or to an account with an Approved Bank that
you have not predesignated in your Account Application, the expedited redemption
request must be made by letter and the signature(s) on the letter must be
guaranteed, regardless of the amount of the redemption. If your expedited
redemption request is received by the Transfer Agent on a
27 PROSPECTUS
<PAGE> 36
Business Day, your redemption proceeds are transmitted to your designated
account with an Approved Bank on the next Business Day (assuming your investment
check has cleared as described above), absent extraordinary circumstances. Such
extraordinary circumstances could include those described above as potentially
delaying redemptions, and also could include situations involving an unusually
heavy volume of wire transfer orders on a national or regional basis or
communication or transmittal delays that could cause a brief delay in the wiring
or crediting of funds. A check for proceeds of less than $5,000 is mailed to
your address of record or, at your election, credited to the Approved Bank
account designated in your Account Application.
REDEMPTIONS THROUGH SELLING AGENTS
If your redemption order is received by a Selling Agent before the close of
trading on the NYSE and received by the Transfer Agent before the close of
business on the same day, the order is executed at the net asset value
determined as of the close of trading on the NYSE on that day. If your
redemption order is received by a Selling Agent after the close of trading on
the NYSE, or not received by the Transfer Agent prior to the close of business,
your order is executed at the net asset value determined as of the close of
trading on the NYSE on the next Business Day.
The Selling Agent is responsible for the prompt transmission of your
redemption order to the Funds.
Unless you have made other arrangements with a Selling Agent, and the Transfer
Agent has been informed of such arrangements, net proceeds of a redemption order
made by you through a Selling Agent are credited to an account with an Approved
Bank that you have designated in your Account Application. If no such account is
designated, a check for the net redemption proceeds is mailed to your address of
record or, if such address is no longer valid, the net redemption proceeds are
credited to your account with the Selling Agent. You may request a check from
the Selling Agent or may elect to retain the net redemption proceeds in such
account. The Selling Agent may charge you a service fee. In addition, it may
benefit from the use of your redemption proceeds until the check it issues to
you has cleared or until such proceeds have been disbursed or reinvested on your
behalf.
REDEMPTIONS THROUGH SHAREHOLDER SERVICING AGENTS
You may request a redemption of Fund shares through your Shareholder Servicing
Agent. If your redemption order is transmitted by the Shareholder Servicing
Agent, on your behalf, to the Transfer Agent before the close of regular trading
on the NYSE, the redemption order is executed at the net asset value determined
as of the close of regular trading on the NYSE on that day. If your Shareholder
Servicing Agent transmits your redemption order to the Transfer Agent after the
close of trading on the NYSE, then your order is executed on the next Business
Day following the date your order is received. The Shareholder Servicing Agent
is responsible for the prompt transmission of redemption orders to the Fund.
PROSPECTUS 28
<PAGE> 37
Unless you have made other arrangements with your Shareholder Servicing Agent,
and the Transfer Agent has been informed of such arrangements, proceeds of a
redemption order made by you through your Shareholder Servicing Agent are
credited to your account with the Approved Bank that you have designated in your
Account Application. If no such account is designated, a check for the proceeds
is mailed to your address of record or, if such address is no longer valid, the
proceeds are credited to your account with your Shareholder Servicing Agent.
EXCHANGE PRIVILEGE
The exchange privilege enables you to purchase, in exchange for shares of a
class of a Fund, shares of the same class of one of the other Funds offered by
this Prospectus, shares of a fund offered by the Trust pursuant to another
prospectus, or shares of certain other investment companies advised by Wells
Fargo Bank or WFNIA, to the extent such shares are offered for sale in your
state of residence. The exchange privilege may be expanded or modified in the
future. You will be notified of any such change. Before any exchange into a fund
offered by another prospectus, you must obtain and should review a copy of the
current prospectus of the fund into which the exchange is being made.
Prospectuses may be obtained from Stephens.
Shares are exchanged at the next determined net asset value; however, a sales
load may be charged with respect to exchanges into a fund sold with a sales
load. No fees currently are charged shareholders directly in connection with
exchanges although the Trust reserves the right, upon not less than 60 days'
written notice, to charge shareholders a nominal exchange fee in accordance with
rules promulgated by the Securities and Exchange Commission. The Trust reserves
the right to limit the number of times shares may be exchanged and to reject in
whole or in part any exchange request into a Fund when management believes that
such action would be in the best interests of the Fund's other shareholders,
such as when management believes such action would be appropriate to protect
such Fund against disruptions in portfolio management resulting from frequent
transactions by those seeking to time market fluctuations. Any such rejection
will be made by management on a prospective basis only, upon notice to the
shareholder given not later than 10 days following such shareholder's most
recent exchange. The exchange privilege may be modified or terminated at any
time upon 60 days' written notice to shareholders.
The exchange of shares of one fund for shares of another is treated for
federal income tax purposes as a sale of the shares given in exchange by the
shareholder and, therefore, an exchanging shareholder may realize a taxable gain
or loss.
29 PROSPECTUS
<PAGE> 38
DIVIDENDS, DISTRIBUTIONS AND TAXES
Each Fund declares and pays dividends from net investment income quarterly.
Each Fund's net investment income available for distribution to the holders of
the Retail Shares will be reduced by the amount of the distribution-related
expenses payable under the Distribution Plan. Each Fund makes distributions from
any net realized securities gains once a year, but may make distributions on a
more frequent basis to comply with the distribution requirements of the Code, in
all events in a manner consistent with the provisions of the 1940 Act. No Fund
will make distributions from net realized securities gains unless capital loss
carryovers, if any, have been utilized or have expired. Dividends are
automatically reinvested in additional Fund shares at net asset value, unless
payment in cash has been requested.
Dividends and capital gains distributions have the effect of reducing the net
asset value per share by the amount distributed on the record date. Although a
distribution paid to you on newly issued shares shortly after purchase would
represent, in substance, a return of capital, the distribution would consist of
net investment income and, accordingly, would be taxable to you as ordinary
income.
Dividends paid by a Fund derived from net investment income and distributions
from any net realized short-term securities gains of such Fund generally are
taxable to U.S. investors as ordinary income, whether or not reinvested in
additional Fund shares. Distributions from any net realized long-term securities
gains generally are taxable to U.S. investors as long-term capital gains for
federal income tax purposes, regardless of how long shareholders have held their
shares and whether such distributions are received in cash or reinvested in
additional Fund shares. The Code provides that the net capital gains of an
individual generally will not be subject to federal income tax at a rate in
excess of 28%.
Dividends derived from net investment income and distributions from net
realized short-term securities gains paid by a Fund to a foreign investor
generally are subject to U.S. nonresident withholding taxes at the rate of 30%,
unless the foreign investor claims the benefits of a lower rate specified in a
tax treaty. Distributions from net realized long-term securities gains paid by a
Fund to a foreign investor, as well as the proceeds of any redemptions from a
foreign investor's Fund account, regardless of the extent to which gain or loss
may be realized, will not be subject to U.S. nonresident withholding tax.
However, such distributions may be subject to backup withholding, as described
below, unless the foreign investor certifies a non-U.S. residency status.
Notice as to the tax status of your dividends and distributions will be mailed
to you annually. You also will receive periodic summaries of your account which
will include information as to dividends and distributions from securities
gains, if any, paid during the year.
PROSPECTUS 30
<PAGE> 39
If you fail to certify either that the TIN furnished in connection with
opening an account is correct or that you have not received notice from the IRS
of being subject to backup withholding as a result of a failure to properly
report taxable dividend or interest income on a federal income tax return,
federal regulations generally require the Trust to withhold ("backup
withholding") and remit to the U.S. Treasury 31% of dividends, distributions
from net realized securities gains and the proceeds of any redemption,
regardless of the extent to which gain or loss may be realized, paid to you.
Furthermore, the IRS may notify the Trust to institute backup withholding if the
IRS determines your TIN is incorrect or if you have failed to properly report
taxable dividend and interest income on a federal income tax return.
A TIN is either the social security number or employer identification number
of the record owner of the account. Any tax withheld as a result of backup
withholding does not constitute an additional tax imposed on the record owner of
the account, and may be claimed as a credit on the record owner's federal income
tax return.
The Master Portfolio is organized as a trust under Delaware law. Under the
Master Portfolio's method of operation as a partnership, the Master Portfolio
and each Master Series is not subject to any income tax. However, each investor
in a Master Series is allocated its share (as determined in accordance with the
governing instruments of the Master Portfolio) of such Master Series' ordinary
income and capital gain in determining its income tax liability. The
determination of such share will be made in accordance with the Code and
regulations promulgated thereunder.
It is expected that each Fund will qualify as a "regulated investment company"
under the Code so long as such qualification is in the best interests of its
shareholders. Such qualification relieves the Fund of any liability for federal
income tax to the extent its earnings are distributed in accordance with
applicable provisions of the Code. In addition, each Fund is subject to a
non-deductible 4% excise tax, measured with respect to certain undistributed
amounts of taxable investment income and capital gains.
The foregoing discussion regarding dividends, distributions, and taxes, is
based on tax laws and regulations which were in effect as of the date of this
Prospectus and summarizes only some of the important federal tax considerations
generally affecting a Fund and its shareholders. It is not intended as a
substitute for careful tax planning; you should consult your tax advisor with
respect to your specific tax situation as well as with respect to state and
local taxes. Further tax information is contained in the Statement of Additional
Information.
31 PROSPECTUS
<PAGE> 40
PERFORMANCE INFORMATION
For purposes of advertising, performance of the LifePath Funds may be
calculated on the basis of average annual total return and/or cumulative total
return of a class of shares. Average annual total return of a class of shares is
calculated pursuant to a standardized formula which assumes that an investment
in that class of shares of the Fund was purchased with an initial payment of
$1,000 and that the investment was redeemed at the end of a stated period of
time, after giving effect to the reinvestment of dividends and distributions
during the period. The return of a class of shares is expressed as a percentage
rate which, if applied on a compounded annual basis, would result in the
redeemable value of the investment in a class of shares at the end of the
period. Advertisements of the performance of a class of shares of a LifePath
Fund includes the Fund's average annual total return of a class of shares for
one, five and ten year periods, or for shorter time periods depending upon the
length of time during which such Fund has operated.
Cumulative total return of a class of shares is computed on a per share basis
and assumes the reinvestment of dividends and distributions. Cumulative total
return of a class of shares generally is expressed as a percentage rate which is
calculated by combining the income and principal changes for a specified period
and dividing by the net asset value per share at the beginning of the period.
Advertisements may include the percentage rate of total return of a class of
shares or may include the value of a hypothetical investment in a class of
shares at the end of the period which assumes the application of the percentage
rate of total return.
Performance of a class of shares varies from time to time, and past results
are not necessarily representative of future results. Investors should remember
that performance is a function of the type and quality of portfolio securities
held by the Master Series in which the Fund invests and is affected by operating
expenses. Performance information, such as that described above, may not provide
a basis for comparison with other investments or other investment companies
using a different method of calculating performance.
Comparative performance information may be used from time to time in
advertising or marketing a Fund's shares, including data from Lipper Analytical
Services, Inc., Bank Rate Monitor, Bond 20-Bond Index, Moody's Bond Survey Bond
Index, Lehman Brothers Aggregate Bond Index and components thereof,
IBC/Donoghue's Money Fund Report, Standard & Poor's 500 Stock Index, Wilshire
5000 Index, the Dow Jones Industrial Average, CDA Investment Technologies, Inc.,
Wiesenberger Investment Companies Service, Mutual Fund Values; Mutual Fund
Forecaster, Schabacker Investment Management, Inc., Morningstar, Inc. and other
industry publications.
Total return quotations are computed separately for each class of the Funds'
shares. See "Management of the Funds - Other Classes of Shares." Because of the
difference in the
PROSPECTUS 32
<PAGE> 41
fees and expenses borne by the Retail Shares of the Funds, the return on such
shares can be expected, at any given time, to be lower than the return on
Institutional Shares.
Additional information about the performance of each Fund is contained in the
Annual Report for each Fund. The Annual Reports may be obtained free of charge
by calling the Trust at 1-800-222-8222.
GENERAL INFORMATION
The Trust was organized as an unincorporated business trust under the laws of
the Commonwealth of Massachusetts pursuant to an Agreement and Declaration of
Trust (the "Trust Agreement") dated May 14, 1993. The Trust is authorized to
issue an unlimited number of shares of beneficial interest. Each LifePath Fund
of the Trust is comprised of two classes of shares - Retail Class and
Institutional Class. Each share has one vote.
To date, the Board of Trustees has authorized the creation of ten separate
portfolios of shares, including the five Funds offered hereby and the Growth and
Value Fund, the International Stock Index Fund, the Prime Money Market Reserve
Fund, the Short-Term Allocation Fund and the Small/Medium Stock Index Fund. All
consideration received by the Trust for shares of one of the portfolios and all
assets in which such consideration is invested belong to that portfolio (subject
only to the rights of creditors of the Trust) and are subject to the liabilities
related thereto. The income attributable to, and the expenses of, one portfolio
are treated separately from those of the other portfolios. The Trust has the
ability to create, from time to time, new portfolios without shareholder
approval.
Under the terms of a License Agreement between the Trust and Wells Fargo Bank,
Wells Fargo Bank has granted the Trust a non-exclusive license to use the name
"Stagecoach." If the License Agreement is terminated, the Trust, at the request
of Wells Fargo Bank, will cease using the name "Stagecoach."
Under Massachusetts law, shareholders could, under certain circumstances, be
held personally liable for the obligations of the Trust. However, the Trust
Agreement disclaims shareholder liability for acts or obligations of the Trust
and requires that notice of such disclaimer be given in each agreement,
obligation or instrument entered into or executed by the Trust or a Trustee. The
Trust Agreement provides for indemnification from the Trust's property for all
losses and expenses of any shareholder held personally liable for the
obligations of the Trust. Thus, the risk of a shareholder incurring financial
loss on account of shareholder liability is limited to circumstances in which
the Trust itself is unable to meet its obligations, a possibility which
management believes is remote. Upon payment of any liability incurred by the
Trust, the shareholder paying such liability is entitled to reimbursement from
the general assets of the Trust. The Trustees intend to conduct the operations
of the Trust in such a way so as to avoid, as far as possible, ultimate
liability of the shareholders for liabilities of the Trust. As described
33 PROSPECTUS
<PAGE> 42
under "Management of the Trust" in the Statement of Additional Information, the
Trust ordinarily does not hold shareholder meetings; however, shareholders under
certain circumstances have the right to call a meeting of shareholders for the
purpose of voting to remove Trustees.
The Transfer Agent maintains a record of each investor's ownership and sends
confirmations and statements of account.
Investor inquiries may be made by writing to the Trust at the address shown on
the front cover or by calling the appropriate telephone number.
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS AND IN THE TRUST'S
OFFICIAL SALES LITERATURE IN CONNECTION WITH THE OFFER OF THE FUNDS' SHARES AND,
IF GIVEN OR MADE, SUCH OTHER INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED
UPON AS HAVING BEEN AUTHORIZED BY THE TRUST. THIS PROSPECTUS DOES NOT CONSTITUTE
AN OFFER IN ANY STATE IN WHICH, OR TO ANY PERSON TO WHOM, SUCH OFFERING MAY NOT
LAWFULLY BE MADE.
PROSPECTUS 34
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<PAGE> 44
APPENDIX
PORTFOLIO SECURITIES
To the extent set forth in this Prospectus, each Fund through its investment
in the corresponding Master Series may invest in the securities described below.
U.S. Government Obligations
U.S. Government obligations include securities issued or guaranteed as to
principal and interest by the U.S. Government and supported by the full faith
and credit of the U.S. Treasury. U.S. Treasury obligations differ mainly in the
length of their maturity. Treasury bills, the most frequently issued marketable
government securities, have a maturity of up to one year and are issued on a
discount basis. U.S. Government obligations also include securities issued or
guaranteed by federal agencies or instrumentalities, including
government-sponsored enterprises. Some obligations of agencies or
instrumentalities of the U.S. Government are supported by the full faith and
credit of the United States or U.S. Treasury guarantees; others, by the right of
the issuer or guarantor to borrow from the U.S. Treasury; still others by the
discretionary authority of the U.S. Government to purchase certain obligations
of the agency or instrumentality; and others, only by the credit of the agency
or instrumentality issuing the obligation. In the case of obligations not backed
by the full faith and credit of the United States, the investor must look
principally to the agency or instrumentality issuing or guaranteeing the
obligation for ultimate repayment, which agency or instrumentality may be
privately owned. There can be no assurance that the U.S. Government would
provide financial support to its agencies or instrumentalities where it is not
obligated to do so. In addition, U.S. Government obligations are subject to
fluctuations in market value due to fluctuations in market interest rates. As a
general matter, the value of debt instruments, including U.S. Government
obligations, declines when market interest rates increase and rises when market
interest rates decrease. Certain types of U.S. Government obligations are
subject to fluctuations in yield or value due to their structure or contract
terms.
Foreign Government Obligations; Securities of Supranational Entities
Each Master Series, through its investment in money market instruments, may
invest in obligations issued or guaranteed by one or more foreign governments or
any of their political subdivisions, agencies or instrumentalities that are
determined by WFNIA to be of comparable quality to the other obligations in
which such Master Series may invest. Such securities also include debt
obligations of supranational entities. Supranational entities include
international organizations designated or supported by governmental entities to
promote economic reconstruction or development and international banking
institutions and related government agencies. Examples include the International
Bank for Reconstruction and Development (the World Bank), the European Coal and
Steel Community, the Asian Development Bank and the InterAmerican Development
Bank. The percentage of a Master Series' assets invested in securities issued by
foreign
A-1 PROSPECTUS
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governments varies depending on the relative yields of such securities, the
economic and financial markets of the countries in which the investments are
made and the interest rate climate of such countries.
Bank Obligations
Each Master Series may invest in bank obligations, including certificates of
deposit, time deposits, bankers' acceptances and other short-term obligations of
domestic banks, foreign subsidiaries of domestic banks, foreign branches of
domestic banks, and domestic and foreign branches of foreign banks, domestic
savings and loan associations and other banking institutions. With respect to
such securities issued by foreign branches of domestic banks, foreign
subsidiaries of domestic banks, and domestic and foreign branches of foreign
banks, a Master Series may be subject to additional investment risks that are
different in some respects from those incurred by a fund which invests only in
debt obligations of U.S. domestic issuers. Such risks include possible future
political and economic developments, the possible imposition of foreign
withholding taxes on interest income payable on the securities, the possible
establishment of exchange controls or the adoption of other foreign governmental
restrictions which might adversely affect the payment of principal and interest
on these securities and the possible seizure or nationalization of foreign
deposits.
Certificates of deposit are negotiable certificates evidencing the obligation
of a bank to repay funds deposited with it for a specified period of time.
Time deposits are non-negotiable deposits maintained in a banking institution
for a specified period of time at a stated interest rate. Time deposits which
may be held by a Master Series will not benefit from insurance from the Bank
Insurance Fund or the Savings Association Insurance Fund administered by the
FDIC.
Bankers' acceptances are credit instruments evidencing the obligation of a
bank to pay a draft drawn on it by a customer. These instruments reflect the
obligation both of the bank and of the drawer to pay the face amount of the
instrument upon maturity. The other short-term obligations may include
uninsured, direct obligations, bearing fixed, floating or variable interest
rates.
Commercial Paper and other Short-Term Corporate Obligations
Each Master Series may invest in commercial paper, which consists of
short-term, unsecured promissory notes issued to finance short-term credit
needs. The commercial paper purchased by the LifePath Master Series consists
only of direct obligations which, at the time of their purchase, are (a) rated
not lower than Prime-1 by Moody's, A-1 by S&P, F-1 by Fitch or Duff-1 by Duff,
(b) issued by companies having an outstanding unsecured debt issue currently
rated not lower than Aa3 by Moody's or AA- by S&P, Fitch or Duff, or (c) if
unrated, determined by WFNIA to be of comparable quality to those rated
obligations which may be purchased by such Master Series.
PROSPECTUS A-2
<PAGE> 46
Repurchase Agreements
Each Master Series may enter into repurchase agreements, which involve the
acquisition by a Master Series of an underlying debt instrument, subject to an
obligation of the seller to repurchase, and such Master Series to resell, the
instrument at a fixed price usually not more than one week after its purchase.
The Master Portfolio's custodian or sub-custodian will have custody of, and will
hold in a segregated account, securities acquired by a Master Series under a
repurchase agreement. Repurchase agreements are considered by the staff of the
Securities and Exchange Commission to be loans by the Master Series entering
into them. In an attempt to reduce the risk of incurring a loss on a repurchase
agreement, each Master Series enters into repurchase agreements only with
federally regulated or insured banks or primary government securities dealers
reporting to the Federal Reserve Bank of New York or their affiliates, or, under
certain circumstances, banks with total assets in excess of $5 billion or
domestic broker/dealers with total equity capital in excess of $100 million,
with respect to securities of the type in which such Master Series may invest or
government securities regardless of their remaining maturities, and requires
that additional securities be deposited with it if the value of the securities
purchased should decrease below repurchase price. WFNIA monitors on an ongoing
basis the value of the collateral to assure that it always equals or exceeds the
repurchase price. Certain costs may be incurred by a Master Series in connection
with the sale of the securities if the seller does not repurchase them in
accordance with the repurchase agreement. In addition, if bankruptcy proceedings
are commenced with respect to the seller of the securities, realization on the
securities by a Master Series may be delayed or limited. Each Master Series
considers on an ongoing basis the creditworthiness of the institutions with
which it enters into repurchase agreements.
Unregistered Notes
Each Master Series may purchase unsecured promissory notes ("Notes") which are
not readily marketable and have not been registered under the Securities Act of
1933, as amended (the "1933 Act"), provided such investments are consistent with
such Master Series' goal. No Master Series invests more than 15% of the value of
its net assets in Notes and in other illiquid securities.
Floating- and Variable-Rate Obligations
Each Master Series may purchase floating- and variable-rate demand notes and
bonds, which are obligations ordinarily having stated maturities in excess of 13
months, but which permit the holder to demand payment of principal at any time
or at specified intervals not exceeding 13 months. Variable-rate demand notes
include master demand notes which are obligations that permit a Master Series to
invest fluctuating amounts, which may change daily without penalty, pursuant to
direct arrangements between the Master Series, as lender, and the borrower. The
interest rates on these notes fluctuate from time to time. The issuer of such
obligations ordinarily has a corresponding right, after a given period, to
prepay in its discretion the outstanding principal amount of the obligations
plus accrued interest upon a specified number of days' notice to the holders
A-3 PROSPECTUS
<PAGE> 47
of such obligations. The interest rate on a floating-rate demand obligation is
based on a known lending rate, such as a bank's prime rate, and is adjusted
automatically each time such rate is adjusted. The interest rate on a
variable-rate demand obligation is adjusted automatically at specified
intervals. Frequently, such obligations are secured by letters of credit or
other credit support arrangements provided by banks. Because these obligations
are direct lending arrangements between the lender and borrower, it is not
contemplated that such instruments generally will be traded. There generally is
no established secondary market for these obligations, although they are
redeemable at face value. Accordingly, where these obligations are not secured
by letters of credit or other credit support arrangements, the Master Series'
right to redeem is dependent on the ability of the borrower to pay principal and
interest on demand. Such obligations frequently are not rated by credit rating
agencies and each Master Series may invest in obligations which are not so rated
only if WFNIA determines that at the time of investment the obligations are of
comparable quality to the other obligations in which such Master Series may
invest. WFNIA, on behalf of each Master Series, considers on an ongoing basis
the creditworthiness of the issuers of the floating- and variable-rate demand
obligations in such Master Series' portfolio. No Master Series invests more than
15% of the value of its net assets in illiquid securities including floating- or
variable-rate demand obligations as to which it cannot exercise the demand
feature on not more than seven days' notice if there is no secondary market
available for these obligations.
Participation Interests
Each Master Series may purchase from financial institutions participation
interests in securities in which such Master Series may invest. A participation
interest gives the Master Series an undivided interest in the security in the
proportion that the Master Series' participation interest bears to the total
principal amount of the security. These instruments may have fixed, floating or
variable rates of interest. If the participation interest is unrated, or has
been given a rating below that which is permissible for purchase by the Master
Series, the participation interest must be backed by an irrevocable letter of
credit or guarantee of a bank, or the payment obligation otherwise must be
collateralized by U.S. Government obligations, or, in the case of unrated
participation interests, WFNIA must have determined that the instrument is of
comparable quality to those instruments in which such Master Series may invest.
Prior to a Master Series' purchase of any such instrument backed by a letter of
credit or guarantee of a bank, WFNIA evaluates the creditworthiness of the bank,
considering all factors which it deems relevant, which generally may include
review of the bank's cash flow; level of short-term debt; leverage;
capitalization; the quality and depth of management; profitability; return on
assets; and economic factors relative to the banking industry. For certain
participation interests, the Master Series has the right to demand payment, on
not more than seven days' notice, for all or any part of the Master Series'
participation interest in the security, plus accrued interest. As to these
instruments, each Master Series intends to exercise its right to demand payment
only upon a default under the terms of the security, as needed
PROSPECTUS A-4
<PAGE> 48
to provide liquidity to meet redemptions, or to maintain or improve the quality
of its investment portfolio.
Mortgage-Related Securities
Each LifePath Master Series may invest in mortgage-related securities
("MBSs"), which are securities representing interests in a pool of loans secured
by mortgages. The resulting cash flow from these mortgages is used to pay
principal and interest on the securities. MBSs are assembled for sale to
investors by various government-sponsored enterprises such as the Federal
National Mortgage Association ("FNMA") and the Federal Home Loan Mortgage
Corporation ("FHLMC") or are guaranteed by such governmental agencies as the
Government National Mortgage Association ("GNMA"). Regardless of the type of
guarantee, all MBSs are subject to interest rate risk (i.e., exposure to loss
due to changes in interest rates).
GNMA MBSs include GNMA Mortgage Pass-Through Certificates (also known as
"Ginnie Maes") which are guaranteed as to the full and timely payment of
principal and interest by GNMA and such guarantee is backed by the authority of
GNMA to borrow funds from the U.S. Treasury to make payments under its
guarantee. GNMA is a wholly-owned U.S. Government corporation within the
Department of Housing and Urban Development and, as such, GNMA obligations are
obligations of the United States and are backed by the full faith and credit of
the federal government. In contrast, MBSs issued by FNMA include FNMA Guaranteed
Mortgage Pass-Through Certificates (also known as "Fannie Maes") which are
solely the obligations of FNMA and are neither backed by nor entitled to the
full faith and credit of the United States. FNMA is a government-sponsored
enterprise which is a private corporation whose stock trades on the NYSE. Fannie
Maes are guaranteed as to timely payment of principal and interest by FNMA. MBSs
issued by FHLMC include FHLMC Mortgage Participation Certificates (also known as
"Freddie Macs" or "PCs"). FHLMC is a government-sponsored enterprise whose MBSs
are solely the obligations of FHLMC. Therefore, Freddie Macs are not guaranteed
by the United States or by any Federal Home Loan Bank and do not constitute a
debt or obligation of the United States or of any Federal Home Loan Bank. FHLMC
guarantees timely payment of interest, but only the ultimate payment of
principal due under the obligations it issues. FHLMC may, under certain
circumstances, remit the guaranteed payment of principal at any time after
default on an underlying mortgage, but in no event later than one year after the
guarantee becomes payable.
American, European and Continental Depositary Receipts
Each LifePath Master Series' assets may be invested in the securities of
foreign issuers in the form of American Depositary Receipts ("ADRs") and
European Depositary Receipts ("EDRs"). These securities may not necessarily be
denominated in the same currency as the securities into which they may be
converted. ADRs are receipts typically issued by a United States bank or trust
company which evidence ownership of underlying securities issued by a foreign
corporation. EDRs, which are sometimes referred to as Continental Depositary
Receipts ("CDRs"), are receipts issued in Europe typically by
A-5 PROSPECTUS
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non-United States banks and trust companies that evidence ownership of either
foreign or domestic securities. Generally, ADRs in registered form are designed
for use in the United States securities markets and EDRs and CDRs in bearer form
are designed for use in Europe. Each LifePath Master Series may invest in ADRs,
EDRs and CDRs through "sponsored" or "unsponsored" facilities. A sponsored
facility is established jointly by the issuer of the underlying security and a
depositary, whereas a depositary may establish an unsponsored facility without
participation by the issuer of the deposited security. Holders of unsponsored
depositary receipts generally bear all the costs of such facilities and the
depositary of an unsponsored facility frequently is under no obligation to
distribute shareholder communications received from the issuer of the deposited
security or to pass through voting rights to the holders of such receipts in
respect of the deposited securities.
Convertible Securities
Each LifePath Master Series may purchase fixed-income convertible securities,
such as bonds or preferred stock, which may be converted at a stated price
within a specified period of time into a specified number of shares of common
stock of the same or a different issuer. Convertible securities are senior to
common stock in a corporation's capital structure, but usually are subordinated
to non-convertible debt securities. While providing a fixed-income stream
(generally higher in yield than the income from a common stock but lower than
that afforded by a non-convertible debt security), a convertible security also
affords an investor the opportunity, through its conversion feature, to
participate in the capital appreciation of the common stock into which it is
convertible.
In general, the market value of a convertible security is the higher of its
"investment value" (i.e., its value as a fixed-income security) or its
"conversion value" (i.e., the value of the underlying shares of common stock if
the security is converted). As a fixed-income security, the market value of a
convertible security generally increases when interest rates decline and
generally decreases when interest rates rise. However, the price of a
convertible security also is influenced by the market value of the security's
underlying common stock. Thus, the price of a convertible security generally
increases as the market value of the underlying stock increases, and generally
decreases as the market value of the underlying stock declines. Investments in
convertible securities generally entail less risk than investments in the common
stock of the same issuer.
Warrants
Each LifePath Master Series may invest generally up to 5% of its net assets in
warrants, except that this limitation does not apply to warrants acquired in
units or attached to securities. A warrant is an instrument issued by a
corporation which gives the holder the right to subscribe to a specified amount
of the corporation's capital stock at a set price for a specified period of
time.
PROSPECTUS A-6
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Illiquid Securities
Each Master Series may invest up to 15% of the value of its net assets in
securities as to which a liquid trading market does not exist, provided such
investments are consistent with its investment objective. Such securities may
include securities that are not readily marketable, such as certain securities
that are subject to legal or contractual restrictions on resale, participation
interests that are not subject to the demand feature described above, floating-
and variable-rate demand obligations as to which the Master Series cannot
exercise the related demand feature described above on not more than seven days'
notice and as to which there is no secondary market and repurchase agreements
providing for settlement in more than seven days after notice. Disposing of
illiquid securities generally will involve additional costs and require
additional time. However, if a substantial market of qualified institutional
buyers develops pursuant to Rule 144A under the 1933 Act for certain of these
securities held by a Master Series, such Master Series intends to treat such
securities as liquid securities in accordance with procedures approved by the
Master Portfolio's Board of Trustees. Because it is not possible to predict with
assurance how the market for restricted securities pursuant to Rule 144A will
develop, the Master Portfolio's Board of Trustees has directed WFNIA to monitor
carefully each Master Series' investments in such securities with particular
regard to trading activity, availability of reliable price information and other
relevant information. To the extent that for a period of time, qualified
institutional buyers cease purchasing such restricted securities pursuant to
Rule 144A, a Master Series' investing in such securities may have the effect of
increasing the level of illiquidity in such Master Series' portfolio during such
period.
Investment Company Securities
Each Master Series may invest in securities issued by other investment
companies which principally invest in securities of the type in which such
Master Series invests. Under the 1940 Act, a Master Series' investment in such
securities currently is limited to, subject to certain exceptions, (i) 3% of the
total voting stock of any one investment company, (ii) 5% of such Master Series'
net assets with respect to any one investment company and (iii) 10% of such
Master Series' net assets in the aggregate. Investments in the securities of
other investment companies involve duplication of advisory fees and certain
other expenses.
RATINGS
The ratings of Moody's, S&P, Fitch and Duff represent their opinions as to the
quality of the obligations which they undertake to rate. It should be
emphasized, however, that ratings are relative and subjective and, although
ratings may be useful in evaluating the safety of interest and principal
payments, they do not evaluate the market value risk of such obligations.
Therefore, although these ratings may be an initial criterion for selection of
portfolio investments, WFNIA also evaluates such obligations and the ability of
their issuers to pay interest and principal. Each Master Series relies on
WFNIA's judgment, analysis and experience in evaluating the creditworthiness of
an issuer. In this evaluation, WFNIA takes into consideration, among other
things, the issuer's financial
A-7 PROSPECTUS
<PAGE> 51
resources, its sensitivity to economic conditions and trends, the quality of the
issuer's management and regulatory matters. It also is possible that a rating
agency might not timely change the rating on a particular issue to reflect
subsequent events. See "Description of the Funds - Risk
Considerations - Fixed-Income Securities."
INVESTMENT TECHNIQUES
Stock Index Options
Each LifePath Master Series may purchase and write (i.e., sell) put and call
options on stock indexes as a substitute for comparable market positions in the
underlying securities. A stock index fluctuates with changes in the market
values of the stocks included in the index. The aggregate premiums paid on all
options purchased may not exceed 20% of a LifePath Master Series' total assets
and the value of options written or purchased may not exceed 10% of the value of
a LifePath Master Series' total assets.
The effectiveness of purchasing or writing stock index options depends upon
the extent to which price movements in the LifePath Master Series' portfolio
correlate with price movements of the stock index selected. Because the value of
an index option depends upon movements in the level of the index rather than the
price of a particular stock, whether a LifePath Master Series realizes a gain or
loss from purchasing or writing options on an index depends upon movements in
the level of stock prices in the stock market generally or, in the case of
certain indices, in an industry or market segment, rather than movements in the
price of a particular stock.
When a LifePath Master Series writes an option on a stock index, such LifePath
Master Series places in a segregated account with the Master Portfolio's
custodian cash or liquid securities in an amount at least equal to the market
value of the underlying stock index and maintains the account while the option
is open or otherwise covers the transaction.
Futures Transactions - In General
None of the LifePath Master Series will be a commodity pool. To the extent
permitted by applicable regulations, each LifePath Master Series is permitted to
use futures as a substitute for a comparable market position in the underlying
securities.
A futures contract is an agreement between two parties, a buyer and a seller,
to exchange a particular commodity at a specific price on a specific date in the
future. Futures contracts are traded on exchanges, where the exchange serves as
the ultimate counterparty for all contracts. Consequently, the only credit risk
on futures contracts is the creditworthiness of the exchange. Futures contracts
are, however, subject to market risk (i.e., exposure to adverse price changes).
Each LifePath Master Series may trade futures contracts and may purchase and
write options on futures contracts in U.S. domestic markets, such as the Chicago
Board of Trade and the International Monetary Market of the Chicago Mercantile
Exchange, or, to the extent permitted under applicable law, on exchanges located
outside the United States, such as the London International Financial Futures
Exchange, the Deutscher
PROSPECTUS A-8
<PAGE> 52
Aktienindex and the Sydney Futures Exchange Limited. See "Description of the
Funds - Risk Considerations - Foreign Futures Transactions."
Each LifePath Master Series' futures transactions must constitute permissible
transactions pursuant to regulations promulgated by the CFTC. In addition, a
LifePath Master Series may not engage in futures transactions if the sum of the
amount of initial margin deposits and premiums paid for unexpired options on
futures contracts, other than those contracts entered into for bona fide hedging
purposes, would exceed 5% of the liquidation value of the Master Series' assets,
after taking into account unrealized profits and unrealized losses on such
contracts; provided, however, that in the case of an option that is in-the-money
at the time of purchase, the in-the-money amount may be excluded in calculating
this 5% liquidation limit. Pursuant to regulations and/or published positions of
the Securities and Exchange Commission, a LifePath Master Series may be required
to segregate cash or high quality money market instruments in connection with
its futures transactions in an amount generally equal to the entire value of the
underlying security.
Initially, when purchasing or selling futures contracts a LifePath Master
Series is required to deposit with the Portfolio's custodian in the broker's
name an amount of cash or cash equivalents up to approximately 10% of the
contract amount. This amount is subject to change by the exchange or board of
trade on which the contract is traded. Members of such exchange or board of
trade may impose their own higher requirements. This amount is known as "initial
margin" and is in the nature of a performance bond or good faith deposit on the
contract which is returned to the LifePath Master Series upon termination of the
futures position, assuming all contractual obligations have been satisfied.
Subsequent payments to and from the broker, known as "variation margin," are
made daily as the price of the index or securities underlying the futures
contract fluctuates, making the long and short positions in the futures contract
more or less valuable, a process known as "marking-to-market." At any time prior
to the expiration of a futures contract, the LifePath Master Series may elect to
close the position by taking an opposite position, at the then-prevailing price,
thereby terminating its existing position in the contract.
Although each LifePath Master Series may purchase or sell futures contracts
only if there is an active market for such contracts, no assurance can be given
that a liquid market will exist for any particular contract at any particular
time. Many futures exchanges and boards of trade limit the amount of fluctuation
permitted in futures contract prices during a single trading day. Once the daily
limit has been reached in a particular contract, no trades may be made that day
at a price beyond that limit or trading may be suspended for specified periods
during the trading day. Futures contract prices could move to the limit for
several consecutive trading days with little or no trading, thereby preventing
prompt liquidation of futures positions and potentially subjecting the relevant
LifePath Master Series to substantial losses. If it is not possible, or the
LifePath Master Series determines not to close a futures position in
anticipation of
A-9 PROSPECTUS
<PAGE> 53
adverse price movements, it will be required to make daily cash payments of
variation margin.
An option on a futures contract gives the purchaser the right, in return for
the premium paid, to assume a position in a futures contract (a long position if
the option is a call and a short position if the option is a put) at a specified
exercise price at any time during the option exercise period. The writer (i.e.,
seller) of the option is required upon exercise to assume an offsetting futures
position (a short position if the option is a call and a long position if the
option is a put). Upon exercise of the option, the assumption of offsetting
futures positions by both the writer and the holder of the option will be
accompanied by delivery of the accumulated cash balance in the writer's futures
margin account in the amount by which the market price of the futures contract,
at exercise, exceeds (in the case of a call) or is less than (in the case of a
put) the exercise price of the option on the futures contract.
Stock Index Futures and Options on Stock Index Futures
Each LifePath Master Series may purchase and sell stock index futures
contracts and options on stock index futures contracts.
A stock index future obligates the seller to deliver (and the purchaser to
take), effectively, an amount of cash equal to a specific dollar amount times
the difference between the value of a specific stock index at the close of the
last trading day of the contract and the price at which the agreement is made.
No physical delivery of the underlying stocks in the index is made. With respect
to stock indices that are permitted investments, each LifePath Master Series
intends to purchase and sell futures contracts on the stock index for which it
can obtain the best price with consideration also given to liquidity.
Interest Rate Futures Contracts and Options on Interest Rate Futures Contracts
Each LifePath Master Series may invest in interest rate futures contracts and
options on interest rate futures contracts as a substitute for a comparable
market position in the underlying securities.
Each LifePath Master Series also may write options on interest rate futures
contracts as part of closing purchase transactions to terminate its options
positions. No assurance can be given that such closing transactions can be
effected or concerning the degree of correlation between price movements in the
options on interest rate futures and price movements in the LifePath Master
Series' portfolio securities which are the subject of the transaction.
Interest Rate and Index Swaps
Each LifePath Master Series may enter into interest rate and index swaps in
pursuit of its investment objective. Interest rate swaps involve the exchange by
a LifePath Master Series with another party of their respective commitments to
pay or receive interest (for example, an exchange of floating-rate payments for
fixed-rate payments). Index swaps involve the exchange by a LifePath Master
Series with another party of cash flows based
PROSPECTUS A-10
<PAGE> 54
upon the performance of an index or a portion of an index (usually including
dividends or income). In each case, the exchange commitments can involve
payments to be made in the same currency or in different currencies.
Each LifePath Master Series usually enters into swaps on a net basis. In so
doing only the net difference of the payment obligations is exchanged between
the counterparties. If a LifePath Master Series enters into a swap, it maintains
a segregated account in an amount equivalent to the gross value of its payment
obligations unless the contract provides otherwise. If the other party to such a
transaction defaults on a swap, the Master Series has contractual remedies
pursuant to the agreements related to the transaction. In such a case, the
LifePath Master Series' risk of loss consists of the net amount of payments that
the LifePath Master Series contractually is entitled to receive.
The use of interest rate and index swaps is a highly specialized activity
which involves investment techniques different from those associated with
ordinary portfolio security transactions. There is no limit, except as provided
below, on the amount of swap transactions that may be entered into by a Master
Series. These transactions generally do not involve the delivery of securities
or other underlying assets or principal. Accordingly, the risk of loss with
respect to swaps generally is limited to the net amount of payments that the
LifePath Master Series is contractually entitled to receive. No LifePath Master
Series invests more than 15% of the value of its net assets in swaps that are
illiquid, and in other illiquid securities.
Foreign Currency Transactions
Each LifePath Master Series may engage in currency exchange transactions
either on a spot (i.e., cash) basis at the rate prevailing in the currency
exchange market, or by entering into forward contracts to purchase or sell
currencies. A forward currency exchange contract involves an obligation between
two parties to exchange a specific currency at a set price on a future date,
which must be more than two days from the date of the contract. These contracts
are entered into in the interbank market conducted directly between currency
traders (typically commercial banks or other financial institutions) and their
customers.
Each LifePath Master Series may combine forward currency exchange contracts
with investments in securities denominated in other currencies.
Each LifePath Master Series also may maintain short positions in forward
currency exchange transactions, which would involve the Master Series agreeing
to exchange an amount of a currency it did not currently own for another
currency at a future date in anticipation of a decline in the value of the
currency sold relative to the currency such Master Series contracted to receive
in the exchange.
Lending Portfolio Securities
From time to time, each Master Series may lend securities from its portfolio
to brokers, dealers and other financial institutions needing to borrow
securities to complete certain transactions. Such loans may not exceed one-third
of the value of the relevant Master Series' total assets. In connection with
such loans, each Master Series receives collateral
A-11 PROSPECTUS
<PAGE> 55
consisting of cash, U.S. Government obligations or other high quality debt
instruments which will be maintained at all times in an amount equal to at least
100% of the current market value of the loaned securities. Each Master Series
can increase its income through the investment of such collateral. Each Master
Series continues to be entitled to receive payments in amounts equal to the
dividends, interest and other distributions payable on the loaned security and
receives interest on the amount of the loan. Such loans are terminable at any
time upon specified notice. A Master Series might experience risk of loss if the
institution with which it has engaged in a portfolio loan transaction breaches
its agreement with such Master Series.
Forward Commitments
Each Master Series may purchase securities on a when-issued or forward
commitment basis, which means that the price is fixed at the time of commitment
but delivery and payment ordinarily take place a number of days after the date
of the commitment to purchase. A Master Series makes commitments to purchase
such securities only with the intention of actually acquiring the securities,
but the Master Series may sell these securities before the settlement date if it
is deemed advisable. The Master Series will not accrue income in respect of a
security purchased on a forward commitment basis prior to its stated delivery
date.
Securities purchased on a when-issued or forward commitment basis and certain
other securities held in the Master Series' portfolio are subject to changes in
value (both generally changing in the same way, i.e., appreciating when interest
rates decline and depreciating when interest rates rise) based upon the public's
perception of the creditworthiness of the issuer and changes, real or
anticipated, in the level of interest rates. Securities purchased on a
when-issued or forward commitment basis may expose the relevant Master Series to
risk because they may experience such fluctuations prior to their actual
delivery. Purchasing securities on a when-issued or forward commitment basis can
involve the additional risk that the yield available in the market when the
delivery takes place actually may be higher than that obtained in the
transaction itself. A segregated account of each Master Series consisting of
cash, U.S. Government obligations or other high quality liquid debt securities
at least equal at all times to the amount of the when-issued or forward
commitments is established and maintained at the Master Portfolio's custodian
bank. Purchasing securities on a forward commitment basis when a Master Series
is fully or almost fully invested may result in greater potential fluctuation in
the value of such Master Series' net assets and its net asset value per share.
Borrowing Money
As a fundamental policy, each Master Series is permitted to borrow to the
extent permitted under the 1940 Act. However, each Master Series currently
intends to borrow money only for temporary or emergency (not leveraging)
purposes, in an amount up to one-third of the value of its total assets
(including the amount borrowed) valued at the lesser of cost or market, less
liabilities (not including the amount borrowed) at the time the borrowing is
made. While borrowings exceed 5% of a Master Series' total assets, such Master
Series will not make any investments.
PROSPECTUS A-12
<PAGE> 56
(This page intentionally left blank)
<PAGE> 57
SPONSOR, DISTRIBUTOR AND ADMINISTRATOR
Stephens Inc.
Little Rock, Arkansas
INVESTMENT ADVISER AND TRANSFER AGENT
Wells Fargo Bank, N.A.
San Francisco, California
SUB-INVESTMENT ADVISER
Wells Fargo Nikko Investment Advisors
San Francisco, California
LEGAL COUNSEL
Morrison & Foerster
Washington, D.C.
INDEPENDENT AUDITORS
KPMG Peat Marwick LLP
San Francisco, California
For more information about the Funds write
or call:
Stagecoach Funds
c/o Wells Fargo Bank, N.A. - Shareholder
Services
P.O. Box 7033
San Francisco, California 94120-9517
1-800-222-8222
LP-1002 (6/95)
<PAGE> 58
STAGECOACH FUNDS
c/o Wells Fargo Bank, N.A.
Shareholder Services
P.O. Box 7033
San Francisco, CA 94120-9517
LP-1002 (6/95)
<PAGE> 59
LIFEPATH FUNDS -- INSTITUTIONAL SHARES
Cross Reference Sheet
Form N-1A Item Number
<TABLE>
<S> <C>
Part A Prospectus Captions
- ------ -------------------
1 Cover Page
2 Description of the Funds
3 Financial Highlights
4 Management of the Funds; General Information;
Appendix
5 Management of the Funds; General Information
6 Management of the Funds; How to Buy Shares;
How to Redeem Shares; Exchange Privilege;
Dividends, Distributions and Taxes;
7 How to Buy Shares; How to Redeem Shares;
Exchange Privilege; Performance Information
8 How to Redeem Shares; Exchange Privilege
9 Not Applicable
Part B Statement of Additional Information Captions
- ------ --------------------------------------------
10 Cover Page
11 Table of Contents
12 Not Applicable
13 Investment Objectives and Management Policies;
SAI Appendix
14 Management of the Trust; Management
Arrangements
15 Information About the Funds; Capital Stock;
Management of the Trust
16 Management of the Trust; Custodian, Transfer
and Dividend Disbursing Agent; Independent
Auditors; Counsel
17 Portfolio Transactions
18 Capital Stock
19 Purchase and Redemption of Shares;
Determination of Net Asset Value
20 Dividends, Distributions and Taxes
21 Management Arrangements
22 Performance Information
23 Financial Statements
Part C General Information
- ------ -------------------
24-32 Information required to be included in Part C
is set forth under the appropriate Item, so
numbered, in Part C of this Document.
</TABLE>
<PAGE> 60
[STAGECOACH FUNDS(R) LOGO]
------------------------------
PROSPECTUS
------------------------------
[STAGECOACH LIFEPATH(TM) FUNDS]
[LIFEPATH 2000(TM) FUND]
[LIFEPATH 2010(TM) FUND]
[LIFEPATH 2020(TM) FUND]
[LIFEPATH 2030(TM) FUND]
[LIFEPATH 2040(TM) FUND]
INSTITUTIONAL CLASS
June 28, 1995
<PAGE> 61
STAGECOACH LIFEPATH(TM) FUNDS
The LifePath Funds consist of five asset allocation funds (the "LifePath
Funds") offered by Stagecoach Trust (the "Trust"), an open-end, management
investment company. By this Prospectus, the Trust is offering shares of the
Institutional Class of the five LifePath Funds. Shares of the Institutional
Class of the LifePath Funds are only available to certain investors. See "How To
Buy Shares".
EACH FUND INVESTS ALL OF ITS ASSETS IN A SEPARATE SERIES (EACH, A "MASTER
SERIES") OF MASTER INVESTMENT PORTFOLIO (THE "MASTER PORTFOLIO"), AN OPEN-END,
MANAGEMENT INVESTMENT COMPANY, RATHER THAN IN A PORTFOLIO OF SECURITIES AND, AS
SUCH, MAY BE CONSIDERED A FEEDER FUND IN A MASTER/FEEDER STRUCTURE. EACH MASTER
SERIES HAS THE SAME INVESTMENT OBJECTIVE AS THE FUND BEARING THE CORRESPONDING
NAME. THEREFORE, EACH FUND'S INVESTMENT EXPERIENCE CORRESPONDS DIRECTLY WITH THE
RELEVANT MASTER SERIES' INVESTMENT EXPERIENCE. SHARES OF THE MASTER SERIES MAY
BE PURCHASED ONLY BY OTHER INVESTMENT COMPANIES OR SIMILAR ACCREDITED INVESTORS.
The LifePath Funds seek to provide long-term investors with an asset
allocation strategy designed to maximize assets for retirement or for other
purposes consistent with the quantitatively measured risk investors, on average,
may be willing to accept given their investment time horizons. Each LifePath
Fund invests in the corresponding LifePath Master Series which invests in a wide
range of U.S. and foreign equity and debt securities and money market
instruments. Investors are encouraged to select a particular LifePath Fund based
on the decade of their anticipated retirement or when they anticipate beginning
to withdraw substantial portions of their investment.
This Prospectus sets forth concisely information about the Trust and Funds
that a prospective investor should know before investing. It should be read and
retained for future reference. A Statement of Additional Information, dated June
28, 1995, which may be revised from time to time, provides a further discussion
of certain areas in this Prospectus and other matters which may be of interest
to some investors. It has been filed with the Securities and Exchange Commission
and is incorporated herein by reference. For a free copy, write to the Trust c/o
Wells Fargo Bank, N.A. -- Transfer Agent, 525 Market Street, San Francisco,
California 94105, or call 1-800-776-0179.
------------------------
FUND SHARES ARE NOT DEPOSITS OR OTHER OBLIGATIONS OF, OR ISSUED, ENDORSED OR
GUARANTEED BY WELLS FARGO BANK, N.A. OR ANY OF ITS AFFILIATES. SUCH SHARES ARE
NOT INSURED BY THE U.S. GOVERNMENT, THE FEDERAL DEPOSIT INSURANCE CORPORATION,
THE FEDERAL RESERVE BOARD OR ANY OTHER AGENCY. AN INVESTMENT IN A FUND INVOLVES
CERTAIN INVESTMENT RISKS, INCLUDING POSSIBLE LOSS OF PRINCIPAL.
------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION, ANY STATE SECURITIES COMMISSION OR ANY OTHER REGULATORY
AUTHORITY NOR HAVE ANY OF THESE AUTHORITIES PASSED UPON THE ACCURACY OR ADEQUACY
OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
PROSPECTUS DATED JUNE 28, 1995
<PAGE> 62
- LIFEPATH 2000 FUND is managed for investors planning to retire (or begin
to withdraw substantial portions of their investment) approximately in the year
2000.
- LIFEPATH 2010 FUND is managed for investors planning to retire (or begin
to withdraw substantial portions of their investment) approximately in the year
2010.
- LIFEPATH 2020 FUND is managed for investors planning to retire (or begin
to withdraw substantial portions of their investment) approximately in the year
2020.
- LIFEPATH 2030 FUND is managed for investors planning to retire (or begin
to withdraw substantial portions of their investment) approximately in the year
2030.
- LIFEPATH 2040 FUND is managed for investors planning to retire (or begin
to withdraw substantial portions of their investment) approximately in the year
2040.
Institutional Shares of each Fund are sold to qualified investors without a
sales charge. Investors can invest, reinvest or redeem Fund Shares at any time
without charge or penalty imposed by the Fund.
This Prospectus describes the Institutional Class Shares. The LifePath
Funds also offer Retail Class Shares. Investors who are not eligible to invest
in the Institutional Class Shares may be eligible to invest in the Retail Class
Shares. A free copy of the current Prospectus for the Retail Class Shares is
available by writing to the Trust c/o Wells Fargo Bank, N.A. -- Shareholder
Services, P.O. Box 7033, San Francisco, California 94120-9517 or by calling
1-800-222-8222.
------------------------
WELLS FARGO BANK, N.A. ("WELLS FARGO BANK") SERVES AS EACH MASTER SERIES'
INVESTMENT ADVISER, WELLS FARGO NIKKO INVESTMENT ADVISORS ("WFNIA") SERVES
AS EACH MASTER SERIES' SUB-INVESTMENT ADVISER, AND TOGETHER WITH
THEIR AFFILIATES, WELLS FARGO BANK AND WFNIA PROVIDE OTHER
SERVICES FOR WHICH THEY ARE COMPENSATED. STEPHENS INC.
("STEPHENS"), WHICH IS NOT AFFILIATED WITH WELLS
FARGO BANK OR WFNIA, SERVES AS THE TRUST'S
ADMINISTRATOR AND AS DISTRIBUTOR OF
EACH FUND'S SHARES.
<PAGE> 63
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Fee Table..................................................... 1
Financial Highlights.......................................... 3
Description of the Funds...................................... 4
Risk Factors................................................ 6
Management of the Funds....................................... 19
How to Buy Shares............................................. 23
How to Redeem Shares.......................................... 28
Exchange Privilege............................................ 32
Dividends, Distributions and Taxes............................ 33
Performance Information....................................... 35
General Information........................................... 36
Appendix...................................................... A-1
</TABLE>
<PAGE> 64
FEE TABLE
<TABLE>
<CAPTION>
LIFEPATH LIFEPATH LIFEPATH LIFEPATH LIFEPATH
2000 2010 2020 2030 2040
FUND FUND FUND FUND FUND
-------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
ANNUAL FUND OPERATING EXPENSES
(as a percentage of average
daily net assets)*:
Master Portfolio
Management Fees................. .55% .55% .55% .55% .55%
Other Expenses
Shareholder Servicing Fees**.... .20% .20% .20% .20% .20%
Miscellaneous Expenses.......... .20% .20% .20% .20% .20%
Total Other Expenses.............. .40% .40% .40% .40% .40%
Total Fund Operating Expenses..... .95% .95% .95% .95% .95%
EXAMPLE:
An investor would pay the
following expenses on a $1,000
investment in the Institutional
Class of the Fund, assuming (1)
5% annual return and (2)
redemption at the end of each
time period:
1 YEAR........................ $ 10 $ 10 $ 10 $ 10 $ 10
3 YEARS....................... $ 30 $ 30 $ 30 $ 30 $ 30
5 YEARS....................... $ 53 $ 53 $ 53 $ 53 $ 53
10 YEARS...................... $117 $117 $117 $117 $117
</TABLE>
- ---------------
* Other mutual funds may invest in a Master Series and such other funds'
expenses and, correspondingly, investment returns may differ from those of
the LifePath Fund that invests in such Master Series.
** A Shareholder Servicing Agent may charge certain fees, in addition to those
imposed by the Trust, for additional services provided by the Shareholder
Servicing Agent. Shareholder Servicing Agents are required to disclose any
such fees to their customers who are Fund shareholders.
- --------------------------------------------------------------------------------
THE AMOUNTS LISTED IN THE EXAMPLE SHOULD NOT BE CONSIDERED AS
REPRESENTATIVE OF FUTURE EXPENSES, AND ACTUAL EXPENSES MAY BE GREATER OR LESS
THAN THOSE INDICATED. MOREOVER, WHILE THE EXAMPLE ASSUMES A 5% ANNUAL RETURN,
EACH FUND'S ACTUAL PERFORMANCE WILL VARY AND MAY RESULT IN AN ACTUAL RETURN
GREATER OR LESS THAN 5%.
- --------------------------------------------------------------------------------
The purpose of the foregoing table is to assist investors in understanding
the various costs and expenses borne by a Fund and a Master Series, and
therefore indirectly by its investors, the payment of which will reduce
investors' return on an annual basis for the Institutional Shares. The Trust's
Board of Trustees believes that the aggregate per share expenses of a Fund and
its corresponding Master Series will be less than or approxi-
1
<PAGE> 65
mately equal to the expenses such Fund would incur if it directly acquired and
managed the type of securities held by such Master Series. The information in
the foregoing table does not reflect any fee waivers or expense reimbursement
arrangements that may be in effect. For a description of the various costs and
expenses incurred in the operation of the Trust and Master Portfolio, as well as
any fee waivers or expense reimbursements, see "Management of the Funds."
2
<PAGE> 66
FINANCIAL HIGHLIGHTS
The following information has been derived from the Financial Highlights in
the Funds' financial statements for the fiscal year ended February 28, 1995. The
financial statements are attached to the Statement of Additional Information for
the Funds. The financial statements have been audited by KPMG Peat Marwick LLP,
independent auditors, whose report dated April 20, 1995 is also attached to the
Statement of Additional Information. This information should be read in
conjunction with the Funds' 1995 annual financial statements and notes thereto.
The Statement of Additional Information has been incorporated by reference into
this Prospectus.
FOR A SHARE OUTSTANDING FOR THE
YEAR ENDED FEBRUARY 28, 1995:
<TABLE>
<CAPTION>
LIFEPATH LIFEPATH LIFEPATH LIFEPATH LIFEPATH
2000 2010 2020 2030 2040
FUND FUND FUND FUND FUND
-------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
Net Asset Value, beginning
of period................ $ 10.00 $ 10.00 $ 10.00 $10.00 $10.00
-------- -------- -------- -------- --------
Income from investment
operations:
Net investment income.... 0.35 0.33 0.30 0.29 0.20
Net realized and
unrealized gain/(loss)
on investments......... (0.12 ) 0.01 0.12 0.14 0.34
-------- -------- -------- -------- --------
Total from investment
operations............... 0.23 0.34 0.42 0.43 0.54
Less distributions:
Dividends from net
investment income...... (0.28 ) (0.27 ) (0.25 ) (0.25) (0.17)
Distributions from net
realized capital
gains.................. (0.01 ) (0.05 ) 0.00 0.00 0.00
-------- -------- -------- -------- --------
Total Distributions........ (0.29 ) (0.32 ) (0.25 ) (0.25) (0.17)
-------- -------- -------- -------- --------
Net Asset Value, end of
period................... $ 9.94 $ 10.02 $ 10.17 $10.18 $10.37
========= ========= ========= ========= =========
Total Return (not
annualized).............. 2.38 % 3.53 % 4.39 % 4.42% 5.55%
</TABLE>
(Continued)
3
<PAGE> 67
<TABLE>
<CAPTION>
LIFEPATH LIFEPATH LIFEPATH LIFEPATH LIFEPATH
2000 2010 2020 2030 2040
FUND FUND FUND FUND FUND
-------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
Ratios/Supplemental Data:
Net assets, end of period
(000).................. $ 7,499 $13,028 $16,618 $9,682 $9,976
Number of shares
outstanding, end of
period (000)........... 754 1,300 1,634 951 962
Ratios to average net
assets (annualized):
Ratio of expenses to
average net
assets(1).............. 0.95 % 0.95 % 0.95 % 0.95% 0.95%
Ratio of net investment
income to average net
assets(1).............. 4.89 % 4.61 % 3.88 % 3.59% 2.61%
Portfolio Turnover(2)...... 17 % 24 % 28 % 40% 5%
</TABLE>
- ---------------
(1) This ratio includes expenses charged to the Master Series.
(2) The portfolio turnover rate represents activity by the Master Series that
was audited by other auditors.
DESCRIPTION OF THE FUNDS
GENERAL
The Trust is a "series fund," which is a mutual fund divided into separate
portfolios. Each portfolio is treated as a separate entity for certain matters
under the Investment Company Act of 1940, as amended (the "1940 Act"), and for
other purposes, and a shareholder of one portfolio is not deemed to be a
shareholder of any other portfolio. Each LifePath Fund is comprised of two
classes of shares -- Retail Class and Institutional Class. As described below,
for certain matters Trust shareholders vote together as a group, as to others
they vote separately by portfolio, and, in certain instances, they vote by class
of shares within a portfolio. In addition, because of differences between the
fees and expenses borne by the Retail Class Shares and Institutional Class
Shares, the net asset value of the shares in these two classes will typically
differ. By this Prospectus, Institutional Class Shares of five of the Trust's
portfolios are being offered -- LifePath 2000 Fund, LifePath 2010 Fund, LifePath
2020 Fund, LifePath 2030 Fund and LifePath 2040 Fund, each of which is
diversified. The Trust has established five other portfolios that are not
offered through this Prospectus. From time to time, other portfolios may be
established. See "General Information."
4
<PAGE> 68
MASTER/FEEDER STRUCTURE
Each Fund is a feeder fund in a master/feeder structure, which means it
invests all of its assets in a separate Master Series of the Master Portfolio
with the same investment objective as such Fund. See "Investment Objectives" and
"Management Policies" below. The Master Portfolio is organized as a trust under
the laws of the State of Delaware. See "Management of the Funds." In addition to
selling its shares to a Fund, each Master Series may sell its shares to certain
other mutual funds or other qualified investors. Information regarding
additional options, if any, for investment in shares of the Master Series is
available from Stephens and may be obtained by calling 1-800-643-9691. The
expenses and, correspondingly, the returns of other investment options in the
Master Portfolio are expected to differ from those of the Funds.
The Board of Trustees believes that, if other investors invest their assets
in a Master Series of the Master Portfolio, certain economic efficiencies may be
realized with respect to such Master Series. For example, fixed expenses that
otherwise would have been borne solely by a Fund would be spread across a larger
asset base provided by more than one fund investing in the Master Series. The
Fund and other entities investing in that Master Series will each be liable for
all obligations of the Master Series. However, the risk of the Fund incurring
financial loss on account of such liability is limited to circumstances in which
both inadequate insurance exists and the Master Portfolio itself is unable to
meet its obligations. Accordingly, the Trust's Board of Trustees believes that
none of the Funds nor their shareholders will be adversely affected by reason of
investing their assets in a Master Series. However, if a mutual fund or other
investor withdraws its investment from such Master Series, the economic
efficiencies (e.g., spreading fixed expenses across a larger asset base) that
the Trust's Board believes should be available through investment in the Master
Series may not be fully achieved. In addition, given the relatively novel nature
of the master/feeder structure, accounting and operational difficulties could
occur.
Each Master Series' investment objective and other fundamental policies,
which are the same as those of the Fund bearing the corresponding name, cannot
be changed without approval by the holders of a majority (as defined in the 1940
Act) of such Master Series' outstanding voting shares. Whenever a Fund, as a
Master Series shareholder, is requested to vote on matters pertaining to any
fundamental policy of such Master Series, the Fund will hold a meeting of its
shareholders to consider such matters and such Fund will cast its votes in
proportion to the votes received from Fund shareholders. A Fund will vote Master
Series shares for which it receives no
5
<PAGE> 69
voting instructions in the same proportion as the votes received from Fund
shareholders. In addition, certain policies of the Master Series which are
non-fundamental could be changed by vote of a majority of the Master Portfolio's
Trustees without shareholder vote. If a Master Series' investment objective or
fundamental or non-fundamental policies are changed, the Fund investing in that
Master Series could subsequently change its objective or policies to correspond
to those of the Master Series or the Fund could redeem its Master Series shares
and either seek a new investment company in which to invest with a matching
objective or retain its own investment adviser to manage such Fund's portfolio
in accordance with its objective. In the latter case, the Fund's inability to
find a substitute investment company in which to invest or equivalent management
services could adversely affect shareholders' investments in that Fund. A Fund
will provide shareholders with 30 days' written notice prior to the
implementation of any change in a non-fundamental policy of such Fund or Master
Series, to the extent possible.
Each LifePath Fund is comprised of two classes of shares -- Retail Class
and Institutional Class. The classes have identical rights with respect to the
series of which they are a part, except that there are certain matters which
affect one class but not another. Currently, the only such matter is the
existence of a Distribution Plan pursuant to Rule 12b-1 under the 1940 Act with
respect to the Retail Class but not the Institutional Class. On all such matters
the shareholders of the affected class vote as a class.
RISK FACTORS
The net asset value and investment return of each LifePath Fund and
LifePath Master Series are expected to fluctuate and are neither insured nor
guaranteed. To the extent that each LifePath Master Series holds both equity and
fixed-income securities, it is subject to equity market risk, as well as credit
and interest rate risks. Equity market risk is the risk that common stock prices
will fluctuate or decline over short or even extended periods of time. Credit
risk is the risk that the issuer of a debt instrument is unable, due to
financial constraints, to make timely payments on its outstanding obligations.
Interest-rate risk is the risk that increases in market interest rates may
adversely affect the value of the debt instruments in which a Fund invests and
hence the value of an investment in the Fund. The value of debt instruments held
by a Fund generally changes inversely to changes in market interest rates.
Investments in foreign securities can expose the Master Series to currency
exchange risks and other potentially adverse consequences associated with
investing in securities markets that are not as developed or efficient as those
in the United States. Certain investment techniques that may be used by the
LifePath Master Series,
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such as investing in stock index options, futures contracts and interest-rate
swaps, present special risk considerations. See "Appendix -- Investment
Techniques" beginning on page A-9. As with all mutual funds, there can be no
assurance that each Fund or Master Series will achieve its investment objective.
This summary of risk factors is qualified by reference to more detailed
descriptions of the risks associated with an investment in the Funds, as set
forth under "Risk Considerations" beginning on page 15 below.
INVESTMENT OBJECTIVES
Each LifePath Fund seeks to provide long-term investors with an asset
allocation strategy designed to maximize assets for retirement or for other
purposes consistent with the quantitatively measured risk investors, on average,
may be willing to accept given their investment time horizons. Specifically:
- LifePath 2000 Fund is managed for investors planning to retire (or begin
to withdraw substantial portions of their investment) approximately in the year
2000.
- LifePath 2010 Fund is managed for investors planning to retire (or begin
to withdraw substantial portions of their investment) approximately in the year
2010.
- LifePath 2020 Fund is managed for investors planning to retire (or begin
to withdraw substantial portions of their investment) approximately in the year
2020.
- LifePath 2030 Fund is managed for investors planning to retire (or begin
to withdraw substantial portions of their investment) approximately in the year
2030.
- LifePath 2040 Fund is managed for investors planning to retire (or begin
to withdraw substantial portions of their investment) approximately in the year
2040.
Each Fund's investment objective cannot be changed without approval by the
holders of a majority (as defined in the 1940 Act) of such Fund's outstanding
voting securities. Each Master Series' investment objective, which is the same
as the corresponding Fund's, cannot be changed without approval by the holders
of a majority (as defined in the 1940 Act) of such Master Series' outstanding
voting shares. Shareholders of a Fund that invests in a Master Series are
provided the opportunity to vote on any proposed change to such Master Series'
investment objective, and that Fund will vote on any such proposal in proportion
to the votes received
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from Fund shareholders. See "General" above. The differences in objectives and
policies among the Master Series determine the types of portfolio securities in
which each Master Series invests and can be expected to affect the degree of
risk to which each Master Series and, therefore, the corresponding Fund is
subject and the yield or return of each Master Series and Fund.
INTRODUCTION
Each Fund invests all of its assets in the Master Series bearing the
corresponding name, which has the same investment objective as such Fund. A Fund
may withdraw its investment in the relevant Master Series at any time, provided
that the Trust's Board of Trustees determines that it is in the best interests
of the Fund to do so. Upon any such withdrawal, the Trust's Board of Trustees
would consider what action should be taken, including investing all such Fund's
assets in another pooled investment entity having the same investment objective
as the Fund, or retaining an investment adviser to manage such Fund's assets in
accordance with the policies described below.
Since the investment characteristics of each Fund correspond directly with
those of the Master Series bearing the corresponding name, the following is a
discussion of the management policies used by each Master Series.
The LifePath Master Series are a diversified series of asset allocation
funds designed for long-term investors. The LifePath 2000 Master Series,
LifePath 2010 Master Series, LifePath 2020 Master Series, LifePath 2030 Master
Series and LifePath 2040 Master Series follow an asset allocation strategy among
three broad investment classes: equity and debt securities of issuers located
throughout the world and cash in the form of money market instruments. Each
LifePath Master Series differs in the weighting assigned to each such investment
class, with the later-dated Master Series generally bearing more risk than the
earlier-dated Master Series, with the expectation of greater total return. Thus,
the investment class weightings of the LifePath 2040 Master Series initially
might be 100%, 0% and 0% among equity securities, debt securities and cash,
respectively, while the weightings of the LifePath 2000 Master Series initially
might be 25%, 50% and 25%, respectively. Over the years, each LifePath Master
Series is managed more conservatively, on the premise that individuals investing
for retirement desire to reduce investment risk in their retirement accounts as
they age. The difference in such investment class weightings is based on the
statistically determined risk that such investors, on average, may be willing
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to accept given their investment time horizons in an effort to maximize assets
in anticipation of retirement or for other purposes.
Investors are encouraged to invest in a particular LifePath Fund based on
the decade of their anticipated retirement or when they anticipate beginning to
withdraw substantial portions of their accounts. For example, the LifePath 2000
Fund is designed for investors in their 50s and 60s who plan to retire (or begin
to withdraw substantial portions of their investment) in approximately 2000; the
LifePath 2010 Fund is designed for investors in their 40s and 50s who plan to
retire (or begin to withdraw as described above) in approximately 2010; and so
on. In addition, when making their investment decisions, investors could
consider evaluating their own risk profiles, recognizing, for example, that the
LifePath 2040 Fund is designed for investors with a high tolerance for risk
while the LifePath 2000 Fund is designed for investors with a low tolerance for
risk.
To manage the LifePath Master Series, WFNIA employs a proprietary
investment model (the "Model") that analyzes extensive financial and economic
data, including risk correlation and expected return statistics, to recommend
the portfolio allocation among the investment classes described below. At its
simplest, for each point in time, the Model recommends a portfolio allocation
designed to maximize total return for each LifePath Master Series based on each
such LifePath Master Series' evolving risk profile. As a result, while each
LifePath Master Series invests in substantially the same securities within an
investment class, the amount of each LifePath Master Series' aggregate assets
invested in a particular investment class, and thus in particular securities,
differs, but the relative percentage that a particular security comprises within
an investment class ordinarily remains substantially the same. As of May 31,
1995 asset allocations in the LifePath Master Series were approximately as
follows:
<TABLE>
<CAPTION>
LIFEPATH LIFEPATH LIFEPATH LIFEPATH LIFEPATH
2040 2030 2020 2010 2000
MASTER MASTER MASTER MASTER MASTER
SERIES SERIES SERIES SERIES SERIES
-------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
Equity Securities........ 100% 80% 70% 50% 25%
Debt Securities.......... 0% 15% 25% 40% 50%
Cash..................... 0% 5% 5% 10% 25%
</TABLE>
WFNIA may in the future refine the Model, or the financial and economic
data analyzed by the Model, in ways that could result in changes to recommended
allocations.
The relative weightings for each LifePath Master Series of the various
investment classes are expected to change over time, with the
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LifePath 2040 Master Series adopting in the 2030s characteristics similar to the
LifePath 2000 Master Series today.
MANAGEMENT POLICIES
LifePath Master Series. The LifePath Model contains both "strategic" and
"tactical" components, with the strategic component weighted more heavily than
the tactical component. The strategic component of the Model evaluates the risk
that investors, on average, may be willing to accept given their investment time
horizons. The strategic component thus determines the changing investment risk
level of each LifePath Fund as time passes. The tactical component of the Model,
on the other hand, addresses short-term market conditions. The tactical
component thus adjusts the amount of investment risk taken by each LifePath Fund
without regard to time horizon, but rather in consideration of the relative
risk-adjusted short-term attractiveness of various asset classes.
Through the strategic and tactical components the asset allocation strategy
contemplates shifts, which may be frequent, among a wide range of U.S. and
foreign investments and market sectors. Each LifePath Master Series may invest
up to approximately 20% of the value of its total assets in foreign securities
that are not publicly traded in the United States. Rather than choosing specific
securities, WFNIA selects indices representing segments of the global equity and
debt markets and invests to create market exposure to these market segments by
purchasing representative samples of securities comprising the indices in an
attempt to replicate their performance. From time to time, other indices may be
selected in addition to, or as a substitute for, any of the indices listed
herein and market exposure may be broadened. Investors will be notified of any
such change.
WFNIA has broad latitude in selecting the class of investments and the
particular securities within a class in which each LifePath Master Series
invests. No LifePath Master Series is managed as a balanced portfolio nor is it
required to maintain a portion of its investments in each of its permitted
investment categories at all times. Until a LifePath Master Series attains an
asset level of approximately $100 to $150 million, WFNIA allocates assets across
fewer of the investment categories identified below than it otherwise would. As
a LifePath Master Series approaches this minimum asset level, WFNIA adds
investment categories from among those identified below, thereby approaching the
desired investment mix over time. WFNIA compares each LifePath Master Series'
investments from time to time to the Model's recommended allocation. Recommended
reallocations are implemented subject to WFNIA's assessment of current economic
conditions and investment opportunities. WFNIA may change from time to time the
criteria and methods it uses to implement the
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recommendations of the Model. Any recommended reallocation is implemented in
accordance with trading policies designed to take advantage of market
opportunities and reduce transaction costs. The asset allocation mix selected is
a primary determinant in the respective LifePath Master Series' investment
performance.
Wells Fargo Bank and WFNIA manage other portfolios which also invest in
accordance with the Model. The performance of each of those other portfolios is
likely to vary among themselves and from the performance of each LifePath Master
Series and corresponding LifePath Fund. Such variation in performance is
primarily due to different equilibrium asset mix assumptions used for the
various portfolios, timing differences in the implementation of the Model's
recommendations and differences in expenses and liquidity requirements.
The LifePath Master Series may invest in up to 17 asset classes, including
10 stock classes, 6 bond classes and a money market class. Each LifePath Master
Series invests in the classes of investments described below in the following
manner:
EQUITY SECURITIES -- The LifePath Master Series seek U.S. equity
market exposure through the following indices of common stock:
- The S&P/BARRA Value Stock Index (consisting of primarily large-
capitalization U.S. stocks with lower-than-average price/book ratios).
- The S&P/BARRA Growth Stock Index (consisting of primarily
large-capitalization U.S. stocks with higher-than-average price/book
ratios).
- The Intermediate Capitalization Value Stock Index (consisting of
primarily medium-capitalization U.S. stocks with lower-than-average
price/book ratios).
- The Intermediate Capitalization Growth Stock Index (consisting of
primarily medium-capitalization U.S. stocks with higher-than-average
price/book ratios).
- The Intermediate Capitalization Utility Stock Index (consisting of
primarily medium-capitalization U.S. utility stocks).
- The Micro Capitalization Market Index (consisting of primarily
small-capitalization U.S. stocks).
- The Small Capitalization Value Stock Index (consisting of primarily
small-capitalization U.S. stocks with lower-than-average price/book
ratios).
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- The Small Capitalization Growth Stock Index (consisting of primarily
small-capitalization U.S. stocks with higher-than-average price/book
ratios).
The LifePath Master Series seek foreign equity market exposure through
the following indices of foreign equity securities:
- The Morgan Stanley Capital International (MSCI) Japan Index (consisting
of primarily large-capitalization Japanese stocks).
- The Morgan Stanley Capital International Europe, Australia, Far East
Index (MSCI EAFE) Ex-Japan Index (consisting of primarily
large-capitalization foreign stocks, excluding Japanese stocks).
In addition, each LifePath Master Series may invest in other common
stocks, preferred stocks and convertible securities, including those in the
form of American, European and Continental Depositary Receipts, as well as
warrants to purchase such securities, and investment company securities.
See "Appendix -- Portfolio Securities."
DEBT SECURITIES -- The LifePath Master Series seek U.S. debt market
exposure through the following indices of U.S. debt securities:
- The Lehman Brothers Long-Term Government Bond Index (consisting of all
U.S. Government bonds with maturities of at least ten years).
- The Lehman Brothers Intermediate-Term Government Bond Index (consisting
of all U.S. Government bonds with maturities of less than ten years and
greater than one year).
- The Lehman Brothers Long-Term Corporate Bond Index (consisting of all
U.S. investment-grade corporate bonds with maturities of at least ten
years).
- The Lehman Brothers Intermediate-Term Corporate Bond Index (consisting of
all U.S. investment-grade corporate bonds with maturities of less than ten
years and greater than one year).
- The Lehman Brothers Mortgage-Backed Securities Index (consisting of all
fixed-coupon mortgage pass-throughs issued by the Federal National
Mortgage Association, Government National Mortgage Association and Federal
Home Loan Mortgage Corporation with maturities greater than one year).
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The LifePath Master Series seek foreign debt market exposure through
the following index of foreign debt securities:
- The Salomon Brothers Non-U.S. World Government Bond Index (consisting of
foreign government bonds with maturities of greater than one year).
Each U.S. and foreign debt security is expected to be part of an issuance
with a minimum outstanding amount at the time of purchase of approximately $50
million and $100 million, respectively. Each security in which a LifePath Master
Series invests must be rated at least Baa by Moody's Investors Service, Inc.
("Moody's"), or BBB by Standard & Poor's Corporation ("S&P"), Fitch Investors
Service, Inc. ("Fitch") or Duff & Phelps, Inc. ("Duff") or, if unrated, deemed
to be of comparable quality by WFNIA. See "Risk Considerations -- Fixed-Income
Securities" below, and "Appendix" in the Statement of Additional Information.
MONEY MARKET INSTRUMENTS -- The money market instrument portion of each
Master Series' portfolio generally is invested in high-quality money market
instruments, including U.S. Government obligations, obligations of domestic and
foreign banks, short-term corporate debt instruments and repurchase agreements.
See "Appendix" below for a more complete description of the money market
instruments in which each Master Series may invest.
INVESTMENT TECHNIQUES -- Each LifePath Master Series also may lend its
portfolio securities and enter into transactions in certain derivatives, each of
which involves risk.
Derivatives are financial instruments whose values are derived, at least in
part, from the prices of other securities or specified assets, indices or rates.
The futures contracts and options on futures contracts that each Master Series
may purchase are considered derivatives. Each Master Series may use some
derivatives as part of its short-term liquidity holdings and/or as substitutes
for comparable market positions in the underlying securities. Also, asset-backed
securities issued or guaranteed by U.S. Government agencies or instrumentalities
and certain floating- and variable-rate instruments can be considered
derivatives. Some derivatives may be more sensitive than direct securities to
changes in interest rates or sudden market moves. Some derivatives also may be
susceptible to fluctuations in yield or value due to their structure or contract
terms.
Wells Fargo Bank (as investment adviser to each Master Series) and WFNIA
(as sub-adviser to each Master Series) use a variety of internal risk management
procedures to ensure that derivatives use is consistent with each Master Series'
and each Fund's investment objective, does not
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<PAGE> 77
expose either the Master Series or a Fund to undue risks and is closely
monitored, including providing periodic reports to the Boards of Trustees
concerning the use of derivatives. Derivatives use also is subject to broadly
applicable investment policies. For example, in no case may a Master Series
invest more than 15% of the current value of its assets in "illiquid
securities," including derivatives without active secondary markets. Nor may a
Master Series use derivatives to create leverage without establishing adequate
"cover" in compliance with Securities and Exchange Commission leverage rules.
For more information, see "Risk Considerations" below, and
"Appendix -- Investment Techniques."
CERTAIN FUNDAMENTAL POLICIES
Each Fund and Master Series may (i) borrow money to the extent permitted
under the 1940 Act; (ii) invest up to 5% of its total assets in the obligations
of any single issuer, except that up to 25% of the value of the total assets of
such Fund or Master Series may be invested and obligations issued or guaranteed
by the U.S. Government, its agencies or instrumentalities may be purchased,
without regard to any such limitation; and (iii) invest up to 25% of the value
of its total assets in the securities of issuers in a particular industry or
group of closely related industries, provided there is no limitation on the
purchase of obligations issued or guaranteed by the U.S. Government, its
agencies or instrumentalities. This paragraph describes fundamental policies
that cannot be changed as to a Fund or Master Series without approval by the
holders of a majority (as defined in the 1940 Act) of the outstanding voting
securities of such Fund or Master Series, as the case may be. See "Investment
Objectives and Management Policies -- Investment Restrictions" in the Statement
of Additional Information.
CERTAIN ADDITIONAL NON-FUNDAMENTAL POLICIES
Each Fund and Master Series may (i) purchase securities of any company
having less than three years' continuous operation (including operations of any
predecessors) if such purchase does not cause the value of its investments in
all such companies to exceed 5% of the value of its total assets; (ii) pledge,
hypothecate, mortgage or otherwise encumber its assets, but only to secure
permitted borrowings; and (iii) invest up to 15% of the value of its net assets
in repurchase agreements providing for settlement in more than seven days after
notice and in other illiquid securities. Although each LifePath Fund and
LifePath Master Series reserves the right to invest up to 15% of the value of
its net assets in illiquid securities, including repurchase agreements providing
for settlement in more than seven days after notice, as long as such Fund's
shares are
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registered for sale in a state that imposes a lower limit on the percentage of a
fund's assets that may be so invested, such LifePath Fund and LifePath Master
Series will comply with the lower limit. Each LifePath Fund currently is limited
to investing up to 10% of the value of its net assets in such securities due to
limits applicable in several states. See "Investment Objectives and Management
Policies -- Investment Restrictions" in the Statement of Additional Information.
RISK CONSIDERATIONS
General -- Since the investment characteristics and, therefore, investment
risks directly associated with such characteristics of each LifePath Fund
correspond to those of the Master Series in which such Fund invests, the
following is a discussion of the risks associated with an investment in the
Master Series.
The net asset value per share of each LifePath Fund is not fixed and should
be expected to fluctuate.
Investment Techniques -- Each LifePath Master Series may engage in various
investment techniques the use of which involves greater risk than that incurred
by other funds with similar investment objectives. See "Appendix -- Investment
Techniques." Using these techniques may affect the degree to which a LifePath
Master Series' net asset value fluctuates.
Equity Securities -- Investors should be aware that equity securities
fluctuate in value, often based on factors unrelated to the value of the issuer
of the securities, and that fluctuations can be pronounced. Changes in the value
of a LifePath Master Series' portfolio securities result in changes in the value
of such LifePath Master Series' shares and thus the LifePath Master Series'
yield and total return to investors.
The securities of the smaller companies in which each LifePath Master
Series may invest may be subject to more abrupt or erratic market movements than
larger, more-established companies, both because the securities typically are
traded in lower volume and because the issuers typically are subject to a
greater degree to changes in earnings and prospects.
Fixed-Income Securities -- Investors should be aware that even though
interest-bearing securities are investments which promise a stable stream of
income, the prices of such securities are inversely affected by changes in
interest rates and, therefore, are subject to the risk of market price
fluctuations. Long-term securities are affected to a greater extent by interest
rates than shorter-term securities. The values of fixed-income securities also
may be affected by changes in the credit rating or financial
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condition of the issuing entities. Once the rating of a portfolio security has
been changed to a rating below investment grade, the particular LifePath Master
Series considers all circumstances deemed relevant in determining whether to
continue to hold the security. Certain securities that may be purchased by the
LifePath Master Series, such as those rated Baa by Moody's and BBB by S&P, Fitch
and Duff, may be subject to such risk with respect to the issuing entity and to
greater market fluctuations than certain lower yielding, higher rated
fixed-income securities. Securities which are rated Baa by Moody's are
considered medium-grade obligations; they are neither highly protected nor
poorly secured, and are considered by Moody's to have speculative
characteristics. Securities rated BBB by S&P are regarded as having adequate
capacity to pay interest and repay principal, and, while such debt securities
ordinarily exhibit adequate protection parameters, adverse economic conditions
or changing circumstances are more likely to lead to a weakened capacity to pay
interest and repay principal for securities in this category than in higher
rated categories. Securities rated BBB by Fitch are considered investment grade
and of satisfactory credit quality; however, adverse changes in economic
conditions and circumstances are more likely to have an adverse impact on these
securities and, therefore, impair timely payment. Securities rated BBB by Duff
have below average protection factors but nonetheless are considered sufficient
for prudent investment. If a security held by a LifePath Master Series is
downgraded to a rating below investment grade, such Master Series may continue
to hold the security until such time as WFNIA determines it advantageous for the
LifePath Master Series to sell the security. If such a policy would cause a
LifePath Master Series to have 5% or more of its net assets invested in
securities that have been downgraded below investment grade, the Master Series
promptly would seek to dispose of such securities in an orderly manner. See
"Appendix -- Portfolio Securities -- Ratings" and "Appendix" in the Statement of
Additional Information.
Foreign Securities -- Foreign securities markets generally are not as
developed or efficient as those in the United States. Securities of some foreign
issuers are less liquid and more volatile than securities of comparable U.S.
issuers. Similarly, volume and liquidity in most foreign securities markets are
less than in the United States, and, at times, volatility of price can be
greater than in the United States. In addition, there may be less publicly
available information about a non-U.S. issuer, and non-U.S. issuers generally
are not subject to uniform accounting and financial reporting standards,
practices and requirements comparable to those applicable to U.S. issuers. See
"Appendix -- Portfolio Securities -- Bank Obligations."
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Because evidences of ownership of such securities usually are held outside
the United States, each Master Series will be subject to additional risks which
include possible adverse political and economic developments, possible seizure
or nationalization of foreign deposits and possible adoption of governmental
restrictions which might adversely affect the payment of principal and interest
on the foreign securities or might restrict the payment of principal and
interest to investors located outside the country of the issuers, whether from
currency blockage or otherwise. Custodial expenses for a portfolio of non-U.S.
securities generally are higher than for a portfolio of U.S. securities.
Since the LifePath Master Series may purchase foreign securities in
currencies of foreign countries, the value of these assets as measured in U.S.
dollars may be affected favorably or unfavorably by changes in currency rates
and exchange control regulations. Some currency exchange costs generally are
incurred when a LifePath Master Series changes investments from one country to
another.
Furthermore, some of these securities may be subject to brokerage or stamp
taxes levied by foreign governments, which have the effect of increasing the
cost of such investment and reducing the realized gain or increasing the
realized loss on such securities at the time of sale. Income received by a
Master Series from sources within foreign countries may be reduced by
withholding and other taxes imposed by such countries. Tax conventions between
certain countries and the United States, however, may reduce or eliminate such
taxes. All such taxes paid by a Master Series reduce its net income available
for distribution to its shareholders.
Foreign Currency Exchange -- Currency exchange rates may fluctuate
significantly over short periods of time. They generally are determined by the
forces of supply and demand in the foreign exchange markets and the relative
merits of investments in different countries, actual or perceived changes in
interest rates and other complex factors, as seen from an international
perspective. Currency exchange rates also can be affected unpredictably by the
intervention of U.S. or foreign governments or central banks, or by the failure
to intervene, or by currency controls or political developments in the United
States or abroad. The LifePath Master Series intend to engage in foreign
currency transactions to maintain the same foreign currency exposure as the
relevant foreign securities index through which the Master Series seek foreign
equity market exposure, but not as part of a defensive strategy to protect
against fluctuations in exchange rates.
Foreign currency transactions may occur on a spot (i.e., cash) basis at the
rate prevailing in the currency exchange market or on a forward basis.
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A forward currency exchange contract involves an obligation to purchase or sell
a specific currency at a set price on a future date which must be more than two
days from the date of the contract. The forward foreign currency market offers
less protection against default than is available when trading currencies on an
exchange, since a forward currency contract is not guaranteed by an exchange or
clearinghouse. Therefore, a default on a forward currency contract would deprive
the LifePath Master Series of unrealized profits or force such Master Series to
cover its commitments for purchase or resale, if any, at the current market
price.
Foreign Futures Transactions -- Unlike trading on domestic futures
exchanges, trading on foreign futures exchanges is not regulated by the
Commodity Futures Trading Commission (the "CFTC") and generally is subject to
greater risks than trading on domestic exchanges. For example, some foreign
exchanges are principal markets so that no common clearing facility exists and
an investor may look only to the broker for performance of the contract. WFNIA,
however, considers on an ongoing basis the creditworthiness of such
counterparties. In addition, any profits that a LifePath Master Series might
realize in trading could be eliminated by adverse changes in the exchange rate;
adverse exchange rate changes also could cause a Master Series to incur losses.
Transactions on foreign exchanges may include both futures contracts which are
traded on domestic exchanges and those which are not.
Other Investment Considerations -- Asset allocation and modeling strategies
are employed by Wells Fargo Bank and WFNIA for other investment companies and
accounts advised or sub-advised by Wells Fargo Bank or WFNIA. If these
strategies indicate particular securities should be purchased or sold, at the
same time, by a LifePath Master Series and one or more of these investment
companies or accounts, available investments or opportunities for sales will be
allocated equitably to each by Wells Fargo Bank or WFNIA. In some cases, this
procedure may adversely affect the size of the position obtained for or disposed
of by a LifePath Master Series or the price paid or received by such LifePath
Master Series.
Under normal market conditions, the portfolio turnover rate for each
LifePath Master Series is not expected to exceed 100%. A portfolio turnover rate
of 100% would occur, for example, if all of a LifePath Master Series' securities
were replaced within one year. Higher portfolio turnover rates are likely to
result in comparatively greater brokerage commissions. In addition, short-term
gains realized from portfolio transactions are taxable to shareholders as
ordinary income. Portfolio turnover will not be a limiting factor in making
investment decisions.
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MANAGEMENT OF THE FUNDS
GENERAL -- The Trust has not retained the services of an investment adviser
because each Fund's assets are invested in a Master Series that has retained
investment advisory services (see "Master Series Investment Adviser and
Sub-Investment Adviser" below).
BOARD OF TRUSTEES -- The business and affairs of the Trust are managed
under the direction of its Board of Trustees. The Trust's Trustees are also the
Master Portfolio's Trustees. The Trust's Board, including a majority of the
Trustees who are not "interested persons" (as that term is defined in the 1940
Act) of the Trust, has adopted procedures to address potential conflicts of
interest that may arise as a result of the structure of the Boards. See
"Management of the Trust" in the Statement of Additional Information. The
Statement of Additional Information also contains the name and general business
experience of each Trustee.
MASTER SERIES INVESTMENT ADVISER AND SUB-INVESTMENT ADVISER -- Wells Fargo
Bank, a wholly owned subsidiary of Wells Fargo & Company located at 420
Montgomery Street, San Francisco, California 94105, is each Master Series'
investment adviser. Wells Fargo Bank, one of the ten largest banks in the United
States, was founded in 1852 and is the oldest bank in the western United States.
As of March 31, 1995, various divisions and affiliates of Wells Fargo Bank
(including WFNIA) provided investment advisory services for approximately $196
billion of assets of individuals, trusts, estates and institutions. Pursuant to
an Investment Advisory Agreement with the Master Portfolio, Wells Fargo Bank
provides investment guidance and policy direction in connection with the
management of each Master Series' assets, subject to the supervision of the
Master Portfolio's Board of Trustees and in conformity with Delaware law and the
stated policies of such Master Series.
Wells Fargo Bank has engaged WFNIA, located at 45 Fremont Street, San
Francisco, California 94105, to provide sub-investment advisory services to each
Master Series. WFNIA is a general partnership owned 50% by a wholly owned
subsidiary of Wells Fargo Bank and 50% by a subsidiary of The Nikko Securities
Co., Ltd. WFNIA is responsible for managing or providing investment advice for
assets aggregating in excess of $171 billion as of March 31, 1995. Pursuant to a
Sub-Investment Advisory Agreement, WFNIA, subject to the supervision and
approval of Wells Fargo Bank, provides investment advisory assistance and the
day-to-day management of each Master Series' assets, subject to the overall
authority of the Master Portfolio's Board of Trustees and in conformity with
Delaware law and the stated policies of such Master Series.
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On June 21, 1995, Wells Fargo & Co. and The Nikko Securities Co., Ltd.
signed a definitive agreement to sell their joint venture interest in WFNIA to
Barclays PLC of the U.K. The sale, which is subject to the approval of
appropriate regulatory authorities, is expected to close in the fourth quarter
of 1995.
Barclays is the largest clearing bank in the U.K., with $259 billion in
total assets. Barclays has announced its intention to combine WFNIA with the
quantitative group of BZW Asset Management ("BZWAM"), its international asset
management arm. BZWAM is the largest quantitative fund manager in Europe, with
approximately $32 billion of quantitative funds under management, as of March
31, 1995. The BZW Division of Barclays, of which BZWAM forms a part, is the
investment banking arm of Barclays and offers a full range of investment
banking, capital markets and asset management services.
Under the 1940 Act, this proposed change of control of WFNIA would result
in an assignment and termination of the current Sub-Investment Advisory
Agreement between WFNIA, Wells Fargo Bank and the Master Series. Subject to the
approval of the Trust's Board of Trustees, it is contemplated that a special
meeting of shareholders of the Funds will be convened to consider a change in
the structure of the Funds, which will become effective only upon the change of
control of WFNIA. It is not anticipated that the proposed change of control or
change in structure will change the investment objectives or overall investment
strategies of the Funds.
Wells Fargo Bank deals, trades and invests for its own account in the types
of securities in which the Master Series may invest and may have deposit, loan
and commercial banking relationships with the issuers of securities purchased by
a Master Series. Wells Fargo Bank has informed the Master Portfolio that in
making its investment decisions it does not obtain or use material inside
information in its possession.
Under the terms of the Investment Advisory Agreement, the Master Portfolio
has agreed to pay a monthly fee at the annual rate of 0.55% of each LifePath
Master Series' average daily net assets. Out of its fees received from the
Master Portfolio, Wells Fargo Bank has agreed to pay WFNIA a monthly fee at the
annual rate of 0.40% of each LifePath Master Series' average daily net assets.
For the fiscal year ended February 28, 1995, the Master Portfolio paid fees of
0.55% with respect to each LifePath Master Series' average daily net assets,
respectively, to Wells Fargo Bank for its advisory services. Each LifePath Fund
bears a pro rata portion of the fees paid to the corresponding Master Series.
Out of its advisory fees, Wells Fargo Bank paid fees of 0.40% with respect to
each LifePath Master
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Series' average daily net assets, respectively, to WFNIA for its sub-investment
advisory services for the same period.
ADMINISTRATOR AND DISTRIBUTOR -- Stephens, located at 111 Center Street,
Little Rock, Arkansas 72201, serves as the Trust's administrator pursuant to an
Administration Agreement with the Trust. Under the Administration Agreement,
Stephens generally supervises all aspects of the operation of the Trust other
than providing investment advice, subject to the overall authority of the Board
of Trustees in accordance with Massachusetts law. The administrative services
provided to the LifePath Funds also include coordination of the other services
provided to the LifePath Funds, compilation of information for reports to the
Securities and Exchange Commission and state securities commissions, preparation
of proxy statements and shareholder reports, and general supervision of data
compilation in connection with preparing periodic reports to the Trust's Board
of Trustees and officers. Stephens also furnishes office space and certain
facilities to conduct the Trust's business and compensates the Trust's Trustees,
officers and employees who are affiliated with Stephens. In addition, except as
noted below, Stephens has assumed all ordinary expenses incurred by a LifePath
Fund other than the fees payable by such Fund pursuant to the Trust's various
service contracts. For providing administrative services to the Trust, the Trust
has agreed to pay Stephens a monthly fee at the annual rate of 0.10% of each
LifePath Fund's average daily net assets. For the fiscal year ended February 28,
1995, the Trust paid Stephens a monthly fee of 0.10% with respect to each
LifePath Fund's average daily net assets.
Stephens also serves as the Trust's principal underwriter within the
meaning of the 1940 Act and as distributor of each Fund's shares pursuant to a
Distribution Agreement with the Trust. The Distribution Agreement provides that
Stephens acts as agent for the Trust for the sale of Fund shares and may enter
into Selling Agreements with Selling Agents that wish to make available shares
of the Funds to their respective customers.
Financial institutions acting as Selling Agents, Shareholder Servicing
Agents, or in certain other capacities may be required to register as dealers
pursuant to applicable state securities laws which may differ from federal law
and any interpretations expressed herein.
Stephens is a full service broker/dealer and investment advisory firm.
Stephens and its predecessor have been providing securities and investment
services for more than 60 years, including discretionary portfolio management
services since 1983. Stephens currently manages investment portfolios for
pension and profit sharing plans, individual investors, foundations, insurance
companies and university endowments.
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CUSTODIAN AND TRANSFER AGENT -- Wells Fargo Institutional Trust Company,
N.A., 45 Fremont Street, San Francisco, California 94105 ("WFITC") is the Master
Portfolio's Custodian but does not receive a fee from the Master Portfolio for
such services. WFITC is owned by WFNIA and Wells Fargo & Company. Wells Fargo
Bank serves as the Trust's custodian and also is the Trust's Transfer and
Dividend Disbursing Agent (the "Transfer Agent"). The Trust has agreed to pay
Wells Fargo Bank, which provides transfer agency services at 525 Market Street,
San Francisco, California 94105, a monthly fee at the annual rate of 0.10% of
each Fund's average daily net assets for transfer agency services.
SHAREHOLDER SERVICING PLAN -- The Trust has adopted a Shareholder Servicing
Plan pursuant to which it may enter into Shareholder Servicing Agreements with
certain financial institutions, securities dealers and other industry
professionals (collectively, "Shareholder Servicing Agents") for the provision
of certain services to Fund shareholders. The services provided may include
personal services relating to shareholder accounts, such as answering
shareholder inquiries regarding the Funds, providing reports and other
information, and providing services related to the maintenance of shareholder
accounts. For the services provided pursuant to a Shareholder Servicing
Agreement, the Trust may pay each Shareholder Servicing Agent a monthly fee at
the annual rate of up to 0.20% of the average daily value of each LifePath
Fund's shares beneficially owned by customers of the Shareholder Servicing
Agent. The fee payable for such services is intended to be a "service fee" as
defined in Article III, Section 26 of the National Association of Securities
Dealers, Inc.'s Rules of Fair Practice. To date the Trust has entered into a
Shareholder Servicing Agreement with Wells Fargo Bank.
The Trust understands that a Shareholder Servicing Agent also may impose
certain conditions on its customers, subject to the terms of this Prospectus, in
addition to or different from those imposed by the Trust, such as requiring a
minimum initial investment or payment of a separate fee for additional services.
Each Shareholder Servicing Agent is required to agree to disclose any fees it
may directly charge its customers who are Fund shareholders and to notify them
in writing at least 30 days before it imposes any transaction fees.
EXPENSES -- Under the Administration Agreement, Stephens has agreed to
assume the operating expenses of each LifePath Fund and a pro rata share of the
operating expenses of each LifePath Master Series, except for extraordinary
expenses and those fees and expenses payable pursuant to the various service
contracts described above which are borne by the Trust and those expenses
specifically assumed by Wells Fargo Bank under
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its contracts with the Funds. The initial term of the Administration Agreement
runs to October 25, 1996; thereafter it continues for successive one-year
periods, subject to approval by the Trust's Board of Trustees. For the fiscal
year ended February 28, 1995, the operating expenses for the Institutional
Shares of each of the LifePath Funds were 0.95% of the average daily net assets
of each of the LifePath Funds, respectively.
Stephens has not assumed the following operating expenses of the LifePath
Master Series: advisory fees, interest, brokerage fees and commissions, if any,
costs of independent pricing services and any extraordinary expenses.
Stephens has not assumed the following operating expenses of the LifePath
Funds: administration fees, Shareholder Servicing Agent fees, Transfer Agent
fees and expenses and any extraordinary expenses.
HOW TO BUY SHARES
GENERAL
Only the following types of investors are eligible to invest in the
Institutional Shares:
- Participants in employee benefit plans, including retirement plans, that
have appointed one of the Trust's Shareholder Servicing Agents as plan
trustee, plan administrator or other agent, or whose plan trustee, plan
administrator or other agent has a servicing arrangement with a
Shareholder Servicing Agent that permits investments in the Institutional
Shares.
- Foundations, corporations and other business entities that have a
servicing arrangement with one of the Trust's Shareholder Servicing
Agents that permits investments in the Institutional Shares and persons
who invest pursuant to an agreement between such an entity and a
Shareholder Servicing Agent.
- Individuals using proceeds which are being rolled over directly from a
qualified employee benefit plan to an Individual Retirement Account
("IRA") pursuant to arrangements between the sponsor or other agent of
the qualified employee benefit plan and a Shareholder Servicing Agent.
Eligible Investors may purchase Institutional Shares in one of the several
ways described below. For more information or additional forms, call
1-800-776-0179. The Trust or Stephens may make the Prospectus available in an
electronic format. Upon receipt of a request by an investor or the investor's
representative, the Trust or Stephens will transmit or
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cause to be transmitted promptly, without charge, a paper copy of the electronic
Prospectus.
The minimum initial investment is $100 by the AutoSaver Plan purchase
method (described below), and $1,000 by all other methods or for all other
investors, except that there is no minimum initial investment amount for
employee benefit plans ("Benefit Plans") or IRA investors. All subsequent
investments must be at least $100, except that there is no minimum subsequent
investment amount for Benefit Plans or IRA investors. All investments in a
Fund's shares are subject to a determination by the Trust that the investment
instructions are complete. If shares are purchased by a check which does not
clear, the Trust reserves the right to cancel the purchase and hold the investor
responsible for any losses or fees incurred. The Trust reserves the right in its
sole discretion to suspend the availability of any Fund's shares and to reject
any purchase requests. Certificates for Fund shares are not issued.
Shares of each Fund may be purchased on any day the New York Stock Exchange
("NYSE") is open for business (a "Business Day") at the net asset value per
share next determined after an order in proper form is received by the Transfer
Agent. Net asset value per share is determined as of the close of regular
trading on the NYSE (currently 4:00 p.m., New York time), on each Business Day.
Currently, the weekdays on which the NYSE is closed are: New Year's Day,
Presidents' Day, Good Friday, Memorial Day, Independence Day, Labor Day,
Thanksgiving Day and Christmas Day.
The net asset value of a share of each class of the LifePath Funds is the
value of total net assets attributable to such class divided by the number of
outstanding shares of that class. The value of the net assets per class is
determined daily by adjusting the net assets per class at the beginning of the
day by the value of each class's shareholder activity, net investment income and
net realized and unrealized gains or losses for that day. Net investment income
is calculated each day for each class by attributing to each class a pro rata
share of daily income and common expenses, and by assigning class-specific
expenses to each class as appropriate. The net asset value of each class is
expected to fluctuate daily and is expected to differ. The Master Series'
investments are valued each Business Day generally by using available market
quotations or at fair value determined in good faith by the investment adviser
or sub-adviser pursuant to guidelines approved by the Master Portfolio's Board
of Trustees. For further information regarding the methods employed in valuing
each Master Series' investments, see "Determination of Net Asset Value" in the
Statement of Additional Information.
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Purchase orders that are received by the Transfer Agent before the close of
regular trading on the NYSE generally are executed on the same day. Orders
received by the Transfer Agent after the close of regular trading on the NYSE
are executed on the next Business Day. The investor's Shareholder Servicing
Agent is responsible for the prompt transmission of the investor's purchase
order to the Transfer Agent on the investor's behalf. Under certain
circumstances, a Shareholder Servicing Agent may establish an earlier deadline
for receipt of orders or an investor's order transmitted to a Shareholder
Servicing Agent may not be received by the Transfer Agent on the same day.
Federal regulations require that an investor provide a certified taxpayer
identification number ("TIN") upon opening or reopening an account. See
"Dividends, Distributions and Taxes" for further information concerning this
requirement. Failure to furnish a certified TIN to the Trust could subject the
investor to a $50 penalty imposed by the IRS.
BENEFIT PLANS
Shares of each Fund are offered to Benefit Plans that have appointed one of
the Trust's Shareholder Servicing Agents as plan trustee, plan administrator or
other agent, or whose plan trustee, plan administrator or other agent has a
servicing arrangement with a Shareholder Servicing Agent that permits
investments in the Institutional Shares. Benefit Plans include 401(k) plans and
other plans qualified under Section 401(a) of the Internal Revenue Code of 1986,
as amended (the "Code"), health and welfare plans and executive deferred
compensation plans. For additional information about Benefit Plans that may be
eligible to invest in Fund shares, prospective investors should contact a
Shareholder Servicing Agent.
Fund investments by participants in 401(k) plans are typically made by
payroll deductions arranged between participants and their employers.
Participants in the Wells Fargo MasterWorks program are included in this group.
Participants also may make direct contributions to their accounts in special
circumstances such as the transfer of a rollover amount from another 401(k) plan
or from a rollover IRA. Investors should contact their employer's benefits
department for more information about contribution methods.
IRAS, KEOGHS AND OTHER INDIVIDUAL RETIREMENT PLANS
An investor may be entitled to invest in a Fund's shares through a tax-
deferred retirement plan. In addition to offering investments in Institutional
Shares through IRA rollovers, a Shareholder Servicing Agent may offer other
types of tax-deferred or tax-advantaged plans, including a
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Keogh retirement plan for self-employed professional persons, sole proprietors
and partnerships. Investors should contact a Shareholder Servicing Agent for
materials describing available plans and their benefits, provisions and fees.
Application materials for opening an IRA rollover, Keogh plan or other
individual retirement plan can be obtained from a Shareholder Servicing Agent.
Completed retirement plan applications should be returned to the investor's
Shareholder Servicing Agent for approval and processing. If an investor's
retirement plan application is incomplete or improperly filled out, there may be
a delay before the Fund account is opened. Certain features described herein,
such as the AutoSaver Plan, may not be available to individuals or entities who
invest through a retirement plan. Investors should consult their Shareholder
Servicing Agent.
PURCHASES BY ELIGIBLE INDIVIDUAL AND CORPORATE INVESTORS
Initial Purchases by Wire
1. Telephone toll free 1-800-776-0179. Give the name of the Fund in which
an investment is being made, and the name(s) in which the shares are to be
registered, address, TIN, amount to be wired, name of the wiring bank and name
and telephone number of the person to be contacted in connection with the order.
Some banks may impose wiring fees.
2. Instruct the wiring bank to transmit the specified amount in federal
funds ($1,000 or more) to:
Wells Fargo Bank, N.A.
San Francisco, California
Bank Routing Number: 121000248
Wire Purchase Account Number: 4068-000587
Attention: Stagecoach Funds (Name of Fund -- Institutional Class)
<TABLE>
<S> <C>
Account Name(s): (name(s) in which to be registered)
Account Number: (if investing into an existing account)
</TABLE>
3. A completed Account Application should be mailed, or sent by
telefacsimile with the original subsequently mailed, to the following address
immediately after the funds are wired and must be received and accepted by the
Transfer Agent before an account can be opened:
Wells Fargo Bank, N.A.
Stagecoach Shareholder Services
P.O. Box 7066
San Francisco, California 94120-7066
Telefacsimile: 1-415-543-9538
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4. Share purchases are effected at the net asset value next determined
after the Account Application is received and accepted.
Initial Purchases by Mail
1. Complete an Account Application. Indicate the services to be used.
2. Mail the Account Application and a check for $1,000 or more, payable to
"Stagecoach Funds (Name of Fund -- Institutional Class)," to the address above.
AutoSaver Plan
The Trust's AutoSaver Plan provides eligible individual and corporate
investors with a convenient way to establish and automatically add to a Fund
account on a monthly basis. To participate in the AutoSaver Plan, an investor
must specify an amount ($100 or more) to be withdrawn automatically by the
Transfer Agent on a monthly basis from an account with a bank, which is
designated in the investor's Account Application and which is approved by the
Transfer Agent ("Approved Bank"). Wells Fargo Bank is an Approved Bank. The
Transfer Agent withdraws and uses this amount to purchase Fund shares on the
investor's behalf on or about the fifth Business Day of each month. There are no
separate fees charged to the investor by the Trust for participating in the
AutoSaver Plan.
An eligible individual or corporate investor may change an investment
amount, suspend purchases or terminate participation in the AutoSaver Plan at
any time by providing written notice to the Transfer Agent at least five
Business Days prior to any scheduled transaction. Participation in the AutoSaver
Plan is terminated automatically if the investor's Approved Bank account balance
is insufficient to make a scheduled withdrawal, or if either the investor's
Approved Bank account or Fund account is closed.
Additional Purchases
An eligible individual or corporate investor may make additional purchases
of $100 or more by instructing the Fund's Transfer Agent to debit a designated
Approved Bank account by wire by using the procedures described under "Initial
Purchases by Wire" above, or by mail with a check payable to "Stagecoach Funds
(Name of Fund -- Institutional Class)" to the above address. An investor must
write the Fund account number on the check and include the detachable stub from
the Statement of Account or include a letter providing the Fund account number.
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HOW TO REDEEM SHARES
GENERAL
Investors may redeem all or a portion of their Institutional Shares on any
Business Day without any charge by the Trust. The redemption price of the shares
is the next determined net asset value of the relevant Fund calculated after the
Trust has received a redemption request in proper form. Redemption proceeds may
be more or less than the amount invested depending on the relevant Fund's net
asset value at the time of purchase and redemption.
The Trust remits redemption proceeds from a Fund within seven days after a
redemption order is received in proper form, absent extraordinary circumstances.
Such extraordinary circumstances could include a period during which an
emergency exists as a result of which (a) disposal by the Master Series in which
such Fund invests of securities owned by the Master Series is not reasonably
practicable or (b) it is not reasonably practicable for the Fund fairly to
determine the value of its net assets, or a period during which the Securities
and Exchange Commission by order permits deferral of redemptions for the
protection of Fund shareholders. In addition, the Trust may defer payment of a
shareholder's redemption until reasonably satisfied that such shareholder's
investments made by check have been collected (which can take up to 15 days from
the purchase date). Payment of redemption proceeds may be made in portfolio
securities, subject to regulation by some state securities commissions.
Telephone redemption or exchange privileges are made available to
shareholders automatically upon opening an account, unless the shareholder
declines the privileges. These privileges authorize the Transfer Agent to act on
telephone instructions from any person representing himself or herself to be the
investor and reasonably believed by the Transfer Agent to be genuine. The Trust
requires the Transfer Agent to employ reasonable procedures, such as requiring a
form of personal identification, to confirm that instructions are genuine and,
if it does not follow such procedures, the Trust or the Transfer Agent may be
liable for any losses due to unauthorized or fraudulent instructions. Neither
the Trust nor the Transfer Agent will be liable for following telephone
instructions reasonably believed to be genuine.
During times of drastic economic or market conditions investors may
experience difficulty in contacting the Transfer Agent by telephone to request a
redemption or exchange of Fund shares. In such cases, investors should consider
using the other redemption procedures made available to such investors. Use of
these other redemption procedures may result in the
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investor's redemption request being processed at a later time than it would have
been if telephone redemption had been used. During the delay, a LifePath Fund's
net asset value may fluctuate.
Due to the high cost of maintaining Fund accounts with small balances, the
Trust reserves the right to close an individual or corporate investor's account
and send the proceeds to such investor if the balance falls below $1,000 because
of a redemption (including a redemption of Fund shares after an investor has
made only the $1,000 minimum initial investment). However, investors will be
given 30 days' notice to make an additional investment to increase their account
balance to $1,000 or more.
Redemption orders that are received by the Transfer Agent before the close
of trading on the NYSE generally are executed at the net asset value determined
as of the close of regular trading on the NYSE on that day. Redemption orders
that are received by the Transfer Agent after the close of trading on the NYSE
are executed on the next Business Day. The investor's Shareholder Servicing
Agent is responsible for the prompt transmission of redemption orders to the
Fund on the investor's behalf. Under certain circumstances, a Shareholder
Servicing Agent may establish an earlier deadline for receipt of orders or an
investor's order transmitted to a Shareholder Servicing Agent may not be
received by the Transfer Agent on the same day.
Unless the investor has made other arrangements with the Shareholder
Servicing Agent and the Transfer Agent has been informed of such arrangements,
proceeds of a redemption order made through the investor's Shareholder Servicing
Agent are credited to the account with the Approved Bank that the investor has
designated in the Account Application. If no such account is designated, a check
for the proceeds is mailed to the investor's address of record or, if such
address is no longer valid, the proceeds are credited to the investor's account
with the investor's Shareholder Servicing Agent.
BENEFIT PLANS, IRAS, KEOGHS AND OTHER INDIVIDUAL RETIREMENT PLANS
Investors in these types of plans are subject to restrictions on
withdrawing their money under the Code. Each type of plan has established
withdrawal procedures that are disclosed to investors at the time of purchase.
Investors may obtain more information by contacting their employer and/or their
Shareholder Servicing Agent. The redemption procedures outlined in the remainder
of this section do not apply to investors in employee benefit plans or
retirement plans, nor do the minimum-balance requirements outlined above.
Investors in these types of plans should
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contact their Shareholder Servicing Agent regarding redemption procedures
applicable to them.
REDEMPTIONS BY ELIGIBLE INDIVIDUAL AND CORPORATE INVESTORS
Redemptions by Mail
1. Write a letter of instruction. Indicate the dollar amount or number of
Fund shares to be redeemed, the Fund account number and TIN.
2. Sign the letter in exactly the same way the account is registered. If
there is more than one owner of the shares, all owners must sign.
3. If shares to be redeemed have a value of $5,000 or more, or redemption
proceeds are to be paid to someone other than the investor at such investor's
address of record, the signature(s) must be guaranteed by an "eligible guarantor
institution," which generally includes a commercial bank whose deposits are
insured by the Federal Deposit Insurance Corporation ("FDIC") a trust company, a
member firm of a domestic stock exchange, a savings association, or a credit
union that is authorized by its charter to provide a signature guarantee.
Signature guarantees by notaries public are not acceptable. Further
documentation may be requested from corporations, administrators, executors,
personal representatives, trustees or custodians.
4. Mail the redemption letter to the Transfer Agent at the mailing address
set forth under "How to Buy Shares -- Initial Purchases By Wire."
Unless other instructions are given in proper form, a check for the
redemption proceeds is sent to the investor's address of record.
Systematic Withdrawal Plan
The Systematic Withdrawal Plan provides an individual or corporate investor
with a convenient way to have Fund shares redeemed from the investor's account
and the proceeds distributed to the investor on a monthly basis. Participation
in the Systematic Withdrawal Plan is permitted if the investor has a Fund
account valued at $10,000 or more as of the date of the election to participate,
the investor has an account at an Approved Bank, dividends and capital gain
distributions are being reinvested automatically, and the investor is not
participating in the AutoSaver Plan at any time while participating in the
Systematic Withdrawal Plan. An investor may specify an amount ($100 or more) to
be distributed by check to the investor's address of record or deposited in the
Approved Bank account designated in the Account Application. The Transfer Agent
redeems sufficient shares and mails or deposits redemption proceeds as
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instructed on or about the fifth Business Day prior to the end of each month.
There are no separate fees charged to investors by the Fund for participating in
the Systematic Withdrawal Plan.
An individual or corporate investor may change the withdrawal amount,
suspend withdrawals or terminate the election to participate in the Systematic
Withdrawal Plan at any time by providing written notice to the Transfer Agent at
least five Business Days prior to any scheduled transaction. An investor's
participation in the Systematic Withdrawal Plan will be terminated automatically
if the investor's Fund account balance is insufficient to make a scheduled
withdrawal or if the investor's Fund account or Approved Bank account is closed.
Expedited Redemptions by Letter and Telephone
An individual or corporate investor may request an expedited redemption of
Fund shares by letter, in which case the investor's receipt of redemption
proceeds, but not the Fund's receipt of the investor's redemption request, would
be expedited. Telephone redemption or exchange privileges are made available to
an investor automatically upon the opening of an account unless the investor
declines the privilege. The investor also may request an expedited redemption of
Fund shares by telephone on any Business Day, in which case both the investor's
receipt of redemption proceeds and the Fund's receipt of the investor's
redemption request would be expedited.
Telephone an expedited redemption request to the Transfer Agent at
1-800-776-0179;
or:
Mail an expedited redemption request to the Transfer Agent at the mailing
address set forth under "How to Buy Shares -- Initial Purchases by Wire."
Upon request, proceeds of expedited redemptions of $5,000 or more are wired
or credited to the Approved Bank account designated in the Account Application.
The Trust reserves the right to impose a charge for wiring redemption proceeds.
When proceeds of an investor's expedited redemption are to be paid to someone
else, to an address other than that of record, or to an account with an Approved
Bank that the investor has not predesignated in the Account Application, the
expedited redemption request must be made by letter and the signature(s) on the
letter must be guaranteed, regardless of the amount of the redemption. If the
individual or corporate investor's expedited redemption request is received by
the Transfer Agent on a Business Day, the investor's redemption proceeds are
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transmitted to the investor's designated account with an Approved Bank on the
next Business Day (assuming the investor's investment check has cleared as
described above), absent extraordinary circumstances. Such extraordinary
circumstances could include those described above as potentially delaying
redemptions, and also could include situations involving an unusually heavy
volume of wire transfer orders on a national or regional basis or communication
or transmittal delays that could cause a brief delay in the wiring or crediting
of funds. A check for proceeds of less than $5,000 is mailed to the investor's
address of record or, at the investor's election, credited to the Approved Bank
account designated in the investor's Account Application.
EXCHANGE PRIVILEGE
The exchange privilege enables an investor to purchase, in exchange for
shares of a class of a Fund, shares of the same class of one of the other Funds
offered by this Prospectus, shares of a fund offered by the Trust pursuant to
another prospectus, or shares of certain other investment companies advised by
Wells Fargo Bank or WFNIA, to the extent such shares are offered for sale in the
investor's state of residence. The exchange privilege may be expanded or
modified in the future. Investors will be notified of any such change. Before
any exchange into a fund offered by another prospectus, the investor must obtain
and should review a copy of the current prospectus of the fund into which the
exchange is being made. Prospectuses may be obtained from Stephens.
Shares are exchanged at the next determined net asset value; however, a
sales load may be charged with respect to exchanges into a fund sold with a
sales load. No fees currently are charged shareholders directly in connection
with exchanges although the Trust reserves the right, upon not less than 60
days' written notice, to charge shareholders a nominal exchange fee in
accordance with rules promulgated by the Securities and Exchange Commission. The
Trust reserves the right to limit the number of times shares may be exchanged
and to reject in whole or in part any exchange request into a Fund when
management believes that such action would be in the best interests of the
Fund's other shareholders, such as when management believes such action would be
appropriate to protect such Fund against disruptions in portfolio management
resulting from frequent transactions by those seeking to time market
fluctuations. Any such rejection will be made by management on a prospective
basis only, upon notice to the shareholder given not later than 10 days
following such shareholder's most recent exchange. The exchange privilege may be
modified or terminated at any time upon 60 days' written notice to shareholders.
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The exchange of shares of one fund for shares of another is treated for
federal income tax purposes as a sale of the shares given in exchange by the
shareholder and, therefore, an exchanging shareholder may realize a taxable gain
or loss.
DIVIDENDS, DISTRIBUTIONS AND TAXES
Each Fund declares and pays dividends from net investment income quarterly.
Each Fund makes distributions from any net realized securities gains once a
year, but may make distributions on a more frequent basis to comply with the
distribution requirements of the Code, in all events in a manner consistent with
the provisions of the 1940 Act. No Fund will make distributions from net
realized securities gains unless capital loss carryovers, if any, have been
utilized or have expired. Dividends are automatically reinvested in additional
Fund shares at net asset value, unless payment in cash has been requested.
Dividends and capital gains distributions have the effect of reducing the
net asset value per share by the amount distributed on the record date. Although
a distribution paid to an investor on newly issued shares shortly after purchase
would represent, in substance, a return of capital, the distribution would
consist of net investment income and, accordingly, would be taxable to the
investor as ordinary income.
Dividends paid by a Fund derived from net investment income and
distributions from any net realized short-term securities gains of such Fund
generally are taxable to taxable U.S. investors as ordinary income, whether or
not reinvested in additional Fund shares. Distributions from any net realized
long-term securities gains generally are taxable to taxable U.S. investors as
long-term capital gains for federal income tax purposes, regardless of how long
shareholders have held their shares and whether such distributions are received
in cash or reinvested in additional Fund shares. The Code provides that the net
capital gains of an individual generally will not be subject to federal income
tax at a rate in excess of 28%.
Dividends derived from net investment income and distributions from net
realized short-term securities gains paid by a Fund to a foreign investor
generally are subject to U.S. nonresident withholding taxes at the rate of 30%,
unless the foreign investor claims the benefits of a lower rate specified in a
tax treaty. Distributions from net realized long-term securities gains paid by a
Fund to a foreign investor, as well as the proceeds of any redemptions from a
foreign investor's Fund account, regardless of the extent to which gain or loss
may be realized, will not be subject to U.S. nonresident withholding tax.
However, such distributions may be subject to
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backup withholding, as described below, unless the foreign investor certifies a
non-U.S. residency status.
Notice as to the tax status of an investor's dividends and distributions
will be mailed to such investor annually. Each investor also will receive
periodic summaries of such investor's account which will include information as
to dividends and distributions from securities gains, if any, paid during the
year.
If a shareholder fails to certify either that the TIN furnished in
connection with opening an account is correct or that such shareholder has not
received notice from the IRS of being subject to backup withholding as a result
of a failure to properly report taxable dividend or interest income on a federal
income tax return, federal regulations generally require the Trust to withhold
("backup withholding") and remit to the U.S. Treasury 31% of dividends,
distributions from net realized securities gains and the proceeds of any
redemption, regardless of the extent to which gain or loss may be realized, paid
to such shareholder. Furthermore, the IRS may notify the Trust to institute
backup withholding if the IRS determines a shareholder's TIN is incorrect or if
a shareholder has failed to properly report taxable dividend and interest income
on a federal income tax return.
A TIN is either the social security number or employer identification
number of the record owner of the account. Any tax withheld as a result of
backup withholding does not constitute an additional tax imposed on the record
owner of the account, and may be claimed as a credit on the record owner's
federal income tax return.
The Master Portfolio is organized as a trust under Delaware law. Under the
Master Portfolio's method of operation as a partnership, the Master Portfolio
and each Master Series is not subject to any income tax. However, each investor
in a Master Series is allocated its share (as determined in accordance with the
governing instruments of the Master Portfolio) of such Master Series' ordinary
income and capital gain in determining its income tax liability. The
determination of such share will be made in accordance with the Code and
regulations promulgated thereunder.
It is expected that each Fund will qualify as a "regulated investment
company" under the Code so long as such qualification is in the best interests
of its shareholders. Such qualification relieves the Fund of any liability for
federal income tax to the extent its earnings are distributed in accordance with
applicable provisions of the Code. In addition, each Fund is subject to a
non-deductible 4% excise tax, measured with respect to
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certain undistributed amounts of taxable investment income and capital gains.
The foregoing discussion regarding dividends, distributions, and taxes is
based on tax laws and regulations which were in effect as of the date of this
Prospectus and summarizes only some of the important federal tax considerations
generally affecting a Fund and its shareholders. It is not intended as a
substitute for careful tax planning; investors should consult their tax advisors
with respect to their specific tax situations as well as with respect to state
and local taxes. Further tax information is contained in the Statement of
Additional Information.
PERFORMANCE INFORMATION
For purposes of advertising, performance of the LifePath Funds may be
calculated on the basis of average annual total return and/or cumulative total
return of a class of shares. Average annual total return of a class of shares is
calculated pursuant to a standardized formula which assumes that an investment
in that class of shares of the Fund was purchased with an initial payment of
$1,000 and that the investment was redeemed at the end of a stated period of
time, after giving effect to the reinvestment of dividends and distributions
during the period. The return of a class of shares is expressed as a percentage
rate which, if applied on a compounded annual basis, would result in the
redeemable value of the investment in a class of shares at the end of the
period. Advertisements of the performance of a class of shares of a LifePath
Fund includes the Fund's average annual total return of a class of shares for
one, five and ten year periods, or for shorter time periods depending upon the
length of time during which such Fund has operated.
Cumulative total return of a class of shares is computed on a per share
basis and assumes the reinvestment of dividends and distributions. Cumulative
total return of a class of shares generally is expressed as a percentage rate
which is calculated by combining the income and principal changes for a
specified period and dividing by the net asset value per share at the beginning
of the period. Advertisements may include the percentage rate of total return of
a class of shares or may include the value of a hypothetical investment in a
class of shares at the end of the period which assumes the application of the
percentage rate of total return.
Performance of a class of shares varies from time to time, and past results
are not necessarily representative of future results. Investors should remember
that performance is a function of the type and quality of portfolio securities
held by the Master Series in which the Fund invests and is affected by operating
expenses. Performance information, such as that described above, may not provide
a basis for comparison with other
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investments or other investment companies using a different method of
calculating performance.
Comparative performance information may be used from time to time in
advertising or marketing a Fund's shares, including data from Lipper Analytical
Services, Inc., Bank Rate Monitor, Bond 20-Bond Index, Moody's Bond Survey Bond
Index, Lehman Brothers Aggregate Bond Index and components thereof,
IBC/Donoghue's Money Fund Report, Standard & Poor's 500 Stock Index, Wilshire
5000 Index, the Dow Jones Industrial Average, CDA Investment Technologies, Inc.,
Wiesenberger Investment Companies Service, Mutual Fund Values; Mutual Fund
Forecaster, Schabacker Investment Management, Inc., Morningstar, Inc. and other
industry publications.
Total return quotations are computed separately for each class of the
Funds' shares. See "Management of the Funds -- Other Classes of Shares." Because
of the difference in the fees and expenses borne by the Retail Shares of the
Funds, the return on such shares can be expected, at any given time, to be lower
than the return on Institutional Shares.
Additional information about the performance of each Fund is contained in
the Annual Report for each Fund. The Annual Reports may be obtained by calling
the Trust at 1-800-776-0179.
GENERAL INFORMATION
The Trust was organized as an unincorporated business trust under the laws
of the Commonwealth of Massachusetts pursuant to an Agreement and Declaration of
Trust (the "Trust Agreement") dated May 14, 1993. The Trust is authorized to
issue an unlimited number of shares of beneficial interest. Each LifePath Fund
of the Trust is comprised of two classes of shares -- Retail Class and
Institutional Class. Each share has one vote.
To date, the Board of Trustees has authorized the creation of ten separate
portfolios of shares, including the five Funds offered hereby and the Growth and
Value Fund, the International Stock Index Fund, the Prime Money Market Reserve
Fund, the Short-Term Allocation Fund and the Small/Medium Stock Index Fund. All
consideration received by the Trust for shares of one of the portfolios and all
assets in which such consideration is invested belong to that portfolio (subject
only to the rights of creditors of the Trust) and are subject to the liabilities
related thereto. The income attributable to, and the expenses of, one portfolio
are treated separately from those of the other portfolios. The Trust has the
ability to create, from time to time, new portfolios without shareholder
approval.
Under the terms of a License Agreement between the Trust and Wells Fargo
Bank, Wells Fargo Bank has granted the Trust a non-exclusive
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license to use the name "Stagecoach." If the License Agreement is terminated,
the Trust, at the request of Wells Fargo Bank, will cease using the name
"Stagecoach."
Under Massachusetts law, shareholders could, under certain circumstances,
be held personally liable for the obligations of the Trust. However, the Trust
Agreement disclaims shareholder liability for acts or obligations of the Trust
and requires that notice of such disclaimer be given in each agreement,
obligation or instrument entered into or executed by the Trust or a Trustee. The
Trust Agreement provides for indemnification from the Trust's property for all
losses and expenses of any shareholder held personally liable for the
obligations of the Trust. Thus, the risk of a shareholder incurring financial
loss on account of shareholder liability is limited to circumstances in which
the Trust itself is unable to meet its obligations, a possibility which
management believes is remote. Upon payment of any liability incurred by the
Trust, the shareholder paying such liability is entitled to reimbursement from
the general assets of the Trust. The Trustees intend to conduct the operations
of the Trust in such a way so as to avoid, as far as possible, ultimate
liability of the shareholders for liabilities of the Trust. As described under
"Management of the Trust" in the Statement of Additional Information, the Trust
ordinarily does not hold shareholder meetings; however, shareholders under
certain circumstances have the right to call a meeting of shareholders for the
purpose of voting to remove Trustees.
The Transfer Agent maintains a record of each investor's ownership and
sends confirmations and statements of account.
Investor inquiries may be made by writing to the Trust at the address shown
on the front cover or by calling the appropriate telephone number.
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS AND IN THE TRUST'S
OFFICIAL SALES LITERATURE IN CONNECTION WITH THE OFFER OF THE FUNDS' SHARES AND,
IF GIVEN OR MADE, SUCH OTHER INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED
UPON AS HAVING BEEN AUTHORIZED BY THE TRUST. THIS PROSPECTUS DOES NOT CONSTITUTE
AN OFFER IN ANY STATE IN WHICH, OR TO ANY PERSON TO WHOM, SUCH OFFERING MAY NOT
LAWFULLY BE MADE.
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APPENDIX
PORTFOLIO SECURITIES
To the extent set forth in this Prospectus, each Fund through its
investment in the corresponding Master Series may invest in the securities
described below.
U.S. GOVERNMENT OBLIGATIONS -- U.S. Government obligations include
securities issued or guaranteed as to principal and interest by the U.S.
Government and supported by the full faith and credit of the U.S. Treasury. U.S.
Treasury obligations differ mainly in the length of their maturity. Treasury
bills, the most frequently issued marketable government securities, have a
maturity of up to one year and are issued on a discount basis. U.S. Government
obligations also include securities issued or guaranteed by federal agencies or
instrumentalities, including government-sponsored enterprises. Some obligations
of agencies or instrumentalities of the U.S. Government are supported by the
full faith and credit of the United States or U.S. Treasury guarantees; others,
by the right of the issuer or guarantor to borrow from the U.S. Treasury; still
others by the discretionary authority of the U.S. Government to purchase certain
obligations of the agency or instrumentality; and others, only by the credit of
the agency or instrumentality issuing the obligation. In the case of obligations
not backed by the full faith and credit of the United States, the investor must
look principally to the agency or instrumentality issuing or guaranteeing the
obligation for ultimate repayment, which agency or instrumentality may be
privately owned. There can be no assurance that the U.S. Government would
provide financial support to its agencies or instrumentalities where it is not
obligated to do so. In addition, U.S. Government obligations are subject to
fluctuations in market value due to fluctuations in market interest rates. As a
general matter, the value of debt instruments, including U.S. Government
obligations, declines when market interest rates increase and rises when market
interest rates decrease. Certain types of U.S. Government obligations are
subject to fluctuations in yield or value due to their structure or contract
terms.
FOREIGN GOVERNMENT OBLIGATIONS; SECURITIES OF SUPRANATIONAL
ENTITIES -- Each Master Series, through its investment in money market
instruments, may invest in obligations issued or guaranteed by one or more
foreign governments or any of their political subdivisions, agencies or
instrumentalities that are determined by WFNIA to be of comparable quality to
the other obligations in which such Master Series may invest. Such securities
also include debt obligations of supranational entities. Supranational entities
include international organizations designated or supported by governmental
entities to promote economic reconstruction or
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development and international banking institutions and related government
agencies. Examples include the International Bank for Reconstruction and
Development (the World Bank), the European Coal and Steel Community, the Asian
Development Bank and the InterAmerican Development Bank. The percentage of a
Master Series' assets invested in securities issued by foreign governments
varies depending on the relative yields of such securities, the economic and
financial markets of the countries in which the investments are made and the
interest rate climate of such countries.
BANK OBLIGATIONS -- Each Master Series may invest in bank obligations,
including certificates of deposit, time deposits, bankers' acceptances and other
short-term obligations of domestic banks, foreign subsidiaries of domestic
banks, foreign branches of domestic banks, and domestic and foreign branches of
foreign banks, domestic savings and loan associations and other banking
institutions. With respect to such securities issued by foreign branches of
domestic banks, foreign subsidiaries of domestic banks, and domestic and foreign
branches of foreign banks, a Master Series may be subject to additional
investment risks that are different in some respects from those incurred by a
fund which invests only in debt obligations of U.S. domestic issuers. Such risks
include possible future political and economic developments, the possible
imposition of foreign withholding taxes on interest income payable on the
securities, the possible establishment of exchange controls or the adoption of
other foreign governmental restrictions which might adversely affect the payment
of principal and interest on these securities and the possible seizure or
nationalization of foreign deposits.
Certificates of deposit are negotiable certificates evidencing the
obligation of a bank to repay funds deposited with it for a specified period of
time.
Time deposits are non-negotiable deposits maintained in a banking
institution for a specified period of time at a stated interest rate. Time
deposits which may be held by a Master Series will not benefit from insurance
from the Bank Insurance Fund or the Savings Association Insurance Fund
administered by the FDIC.
Bankers' acceptances are credit instruments evidencing the obligation of a
bank to pay a draft drawn on it by a customer. These instruments reflect the
obligation both of the bank and of the drawer to pay the face amount of the
instrument upon maturity. The other short-term obligations may include
uninsured, direct obligations, bearing fixed, floating or variable interest
rates.
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COMMERCIAL PAPER AND OTHER SHORT-TERM CORPORATE OBLIGATIONS -- Each Master
Series may invest in commercial paper, which consists of short-term, unsecured
promissory notes issued to finance short-term credit needs. The commercial paper
purchased by the LifePath Master Series consists only of direct obligations
which, at the time of their purchase, are (a) rated not lower than Prime-1 by
Moody's, A-1 by S&P, F-1 by Fitch or Duff-1 by Duff, (b) issued by companies
having an outstanding unsecured debt issue currently rated not lower than Aa3 by
Moody's or AA- by S&P, Fitch or Duff, or (c) if unrated, determined by WFNIA to
be of comparable quality to those rated obligations which may be purchased by
such Master Series.
REPURCHASE AGREEMENTS -- Each Master Series may enter into repurchase
agreements, which involve the acquisition by a Master Series of an underlying
debt instrument, subject to an obligation of the seller to repurchase, and such
Master Series to resell, the instrument at a fixed price usually not more than
one week after its purchase. The Master Portfolio's custodian or sub-custodian
will have custody of, and will hold in a segregated account, securities acquired
by a Master Series under a repurchase agreement. Repurchase agreements are
considered by the staff of the Securities and Exchange Commission to be loans by
the Master Series entering into them. In an attempt to reduce the risk of
incurring a loss on a repurchase agreement, each Master Series enters into
repurchase agreements only with federally regulated or insured banks or primary
government securities dealers reporting to the Federal Reserve Bank of New York
or their affiliates, or, under certain circumstances, banks with total assets in
excess of $5 billion or domestic broker/dealers with total equity capital in
excess of $100 million, with respect to securities of the type in which such
Master Series may invest or government securities regardless of their remaining
maturities, and requires that additional securities be deposited with it if the
value of the securities purchased should decrease below repurchase price. WFNIA
monitors on an ongoing basis the value of the collateral to assure that it
always equals or exceeds the repurchase price. Certain costs may be incurred by
a Master Series in connection with the sale of the securities if the seller does
not repurchase them in accordance with the repurchase agreement. In addition, if
bankruptcy proceedings are commenced with respect to the seller of the
securities, realization on the securities by a Master Series may be delayed or
limited. Each Master Series considers on an ongoing basis the creditworthiness
of the institutions with which it enters into repurchase agreements.
UNREGISTERED NOTES -- Each Master Series may purchase unsecured promissory
notes ("Notes") which are not readily marketable and have not been registered
under the Securities Act of 1933, as amended (the "1933
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Act"), provided such investments are consistent with such Master Series' goal.
No Master Series invests more than 15% of the value of its net assets in Notes
and in other illiquid securities.
FLOATING- AND VARIABLE-RATE OBLIGATIONS -- Each Master Series may purchase
floating- and variable-rate demand notes and bonds, which are obligations
ordinarily having stated maturities in excess of 13 months, but which permit the
holder to demand payment of principal at any time or at specified intervals not
exceeding 13 months. Variable-rate demand notes include master demand notes
which are obligations that permit a Master Series to invest fluctuating amounts,
which may change daily without penalty, pursuant to direct arrangements between
the Master Series, as lender, and the borrower. The interest rates on these
notes fluctuate from time to time. The issuer of such obligations ordinarily has
a corresponding right, after a given period, to prepay in its discretion the
outstanding principal amount of the obligations plus accrued interest upon a
specified number of days' notice to the holders of such obligations. The
interest rate on a floating-rate demand obligation is based on a known lending
rate, such as a bank's prime rate, and is adjusted automatically each time such
rate is adjusted. The interest rate on a variable-rate demand obligation is
adjusted automatically at specified intervals. Frequently, such obligations are
secured by letters of credit or other credit support arrangements provided by
banks. Because these obligations are direct lending arrangements between the
lender and borrower, it is not contemplated that such instruments generally will
be traded. There generally is no established secondary market for these
obligations, although they are redeemable at face value. Accordingly, where
these obligations are not secured by letters of credit or other credit support
arrangements, the Master Series' right to redeem is dependent on the ability of
the borrower to pay principal and interest on demand. Such obligations
frequently are not rated by credit rating agencies and each Master Series may
invest in obligations which are not so rated only if WFNIA determines that at
the time of investment the obligations are of comparable quality to the other
obligations in which such Master Series may invest. WFNIA, on behalf of each
Master Series, considers on an ongoing basis the creditworthiness of the issuers
of the floating- and variable-rate demand obligations in such Master Series'
portfolio. No Master Series invests more than 15% of the value of its net assets
in illiquid securities including floating- or variable-rate demand obligations
as to which it cannot exercise the demand feature on not more than seven days'
notice if there is no secondary market available for these obligations.
PARTICIPATION INTERESTS -- Each Master Series may purchase from financial
institutions participation interests in securities in which such Master Series
may invest. A participation interest gives the Master Series
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an undivided interest in the security in the proportion that the Master Series'
participation interest bears to the total principal amount of the security.
These instruments may have fixed, floating or variable rates of interest. If the
participation interest is unrated, or has been given a rating below that which
is permissible for purchase by the Master Series, the participation interest
must be backed by an irrevocable letter of credit or guarantee of a bank, or the
payment obligation otherwise must be collateralized by U.S. Government
obligations, or, in the case of unrated participation interests, WFNIA must have
determined that the instrument is of comparable quality to those instruments in
which such Master Series may invest. Prior to a Master Series' purchase of any
such instrument backed by a letter of credit or guarantee of a bank, WFNIA
evaluates the creditworthiness of the bank, considering all factors which it
deems relevant, which generally may include review of the bank's cash flow;
level of short-term debt; leverage; capitalization; the quality and depth of
management; profitability; return on assets; and economic factors relative to
the banking industry. For certain participation interests, the Master Series has
the right to demand payment, on not more than seven days' notice, for all or any
part of the Master Series' participation interest in the security, plus accrued
interest. As to these instruments, each Master Series intends to exercise its
right to demand payment only upon a default under the terms of the security, as
needed to provide liquidity to meet redemptions, or to maintain or improve the
quality of its investment portfolio.
MORTGAGE-RELATED SECURITIES -- Each LifePath Master Series may invest in
mortgage-related securities ("MBSs"), which are securities representing
interests in a pool of loans secured by mortgages. The resulting cash flow from
these mortgages is used to pay principal and interest on the securities. MBSs
are assembled for sale to investors by various government-sponsored enterprises
such as the Federal National Mortgage Association ("FNMA") and the Federal Home
Loan Mortgage Corporation ("FHLMC") or are guaranteed by such governmental
agencies as the Government National Mortgage Association ("GNMA"). Regardless of
the type of guarantee, all MBSs are subject to interest rate risk (i.e.,
exposure to loss due to changes in interest rates).
GNMA MBSs include GNMA Mortgage Pass-Through Certificates (also known as
"Ginnie Maes") which are guaranteed as to the full and timely payment of
principal and interest by GNMA and such guarantee is backed by the authority of
GNMA to borrow funds from the U.S. Treasury to make payments under its
guarantee. GNMA is a wholly-owned U.S. Government corporation within the
Department of Housing and Urban Development and, as such, GNMA obligations are
general obligations of the United States and are backed by the full faith and
credit of the
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federal government. In contrast, MBSs issued by FNMA include FNMA Guaranteed
Mortgage Pass-Through Certificates (also known as "Fannie Maes") which are
solely the obligations of FNMA and are neither backed by nor entitled to the
full faith and credit of the United States. FNMA is a government-sponsored
enterprise which is also a private corporation whose stock trades on the NYSE.
Fannie Maes are guaranteed as to timely payment of principal and interest by
FNMA. MBSs issued by FHLMC include FHLMC Mortgage Participation Certificates
(also known as "Freddie Macs" or "PCs"). FHLMC is a government-sponsored
enterprise whose MBSs are solely obligations of FHLMC. Therefore, Freddie Macs
are not guaranteed by the United States or by any Federal Home Loan Bank and do
not constitute a debt or obligation of the United States or of any Federal Home
Loan Bank. FHLMC guarantees timely payment of interest, but only ultimate
payment of principal due under the obligations it issues. FHLMC may, under
certain circumstances, remit the guaranteed payment of principal at any time
after default on an underlying mortgage, but in no event later than one year
after the guarantee becomes payable.
AMERICAN, EUROPEAN AND CONTINENTAL DEPOSITARY RECEIPTS -- Each LifePath
Master Series' assets may be invested in the securities of foreign issuers in
the form of American Depositary Receipts ("ADRs") and European Depositary
Receipts ("EDRs"). These securities may not necessarily be denominated in the
same currency as the securities into which they may be converted. ADRs are
receipts typically issued by a United States bank or trust company which
evidence ownership of underlying securities issued by a foreign corporation.
EDRs, which are sometimes referred to as Continental Depositary Receipts
("CDRs"), are receipts issued in Europe typically by non-United States banks and
trust companies that evidence ownership of either foreign or domestic
securities. Generally, ADRs in registered form are designed for use in the
United States securities markets and EDRs and CDRs in bearer form are designed
for use in Europe. Each LifePath Master Series may invest in ADRs, EDRs and CDRs
through "sponsored" or "unsponsored" facilities. A sponsored facility is
established jointly by the issuer of the underlying security and a depositary,
whereas a depositary may establish an unsponsored facility without participation
by the issuer of the deposited security. Holders of unsponsored depositary
receipts generally bear all the costs of such facilities and the depositary of
an unsponsored facility frequently is under no obligation to distribute
shareholder communications received from the issuer of the deposited security or
to pass through voting rights to the holders of such receipts in respect of the
deposited securities.
CONVERTIBLE SECURITIES -- Each LifePath Master Series may purchase
fixed-income convertible securities, such as bonds or preferred
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stock, which may be converted at a stated price within a specified period of
time into a specified number of shares of common stock of the same or a
different issuer. Convertible securities are senior to common stock in a
corporation's capital structure, but usually are subordinated to non-convertible
debt securities. While providing a fixed-income stream (generally higher in
yield than the income from a common stock but lower than that afforded by a
non-convertible debt security), a convertible security also affords an investor
the opportunity, through its conversion feature, to participate in the capital
appreciation of the common stock into which it is convertible.
In general, the market value of a convertible security is the higher of its
"investment value" (i.e., its value as a fixed-income security) or its
"conversion value" (i.e., the value of the underlying shares of common stock if
the security is converted). As a fixed-income security, the market value of a
convertible security generally increases when interest rates decline and
generally decreases when interest rates rise. However, the price of a
convertible security also is influenced by the market value of the security's
underlying common stock. Thus, the price of a convertible security generally
increases as the market value of the underlying stock increases, and generally
decreases as the market value of the underlying stock declines. Investments in
convertible securities generally entail less risk than investments in the common
stock of the same issuer.
WARRANTS -- Each LifePath Master Series may invest generally up to 5% of
its net assets in warrants, except that this limitation does not apply to
warrants acquired in units or attached to securities. A warrant is an instrument
issued by a corporation which gives the holder the right to subscribe to a
specified amount of the corporation's capital stock at a set price for a
specified period of time.
ILLIQUID SECURITIES -- Each Master Series may invest up to 15% of the value
of its net assets in securities as to which a liquid trading market does not
exist, provided such investments are consistent with its investment objective.
Such securities may include securities that are not readily marketable, such as
certain securities that are subject to legal or contractual restrictions on
resale, participation interests that are not subject to the demand feature
described above, floating- and variable-rate demand obligations as to which the
Master Series cannot exercise the related demand feature described above on not
more than seven days' notice and as to which there is no secondary market and
repurchase agreements providing for settlement in more than seven days after
notice. Disposing of illiquid securities generally will involve additional costs
and require additional time. However, if a substantial market of qualified
institutional buyers
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develops pursuant to Rule 144A under the 1933 Act for certain of these
securities held by a Master Series, such Master Series intends to treat such
securities as liquid securities in accordance with procedures approved by the
Master Portfolio's Board of Trustees. Because it is not possible to predict with
assurance how the market for restricted securities pursuant to Rule 144A will
develop, the Master Portfolio's Board of Trustees has directed WFNIA to monitor
carefully each Master Series' investments in such securities with particular
regard to trading activity, availability of reliable price information and other
relevant information. To the extent that for a period of time, qualified
institutional buyers cease purchasing such restricted securities pursuant to
Rule 144A, a Master Series' investing in such securities may have the effect of
increasing the level of illiquidity in such Master Series' portfolio during such
period.
INVESTMENT COMPANY SECURITIES -- Each Master Series may invest in
securities issued by other investment companies which principally invest in
securities of the type in which such Master Series invests. Under the 1940 Act,
a Master Series' investment in such securities currently is limited to, subject
to certain exceptions, (i) 3% of the total voting stock of any one investment
company, (ii) 5% of such Master Series' net assets with respect to any one
investment company and (iii) 10% of such Master Series' net assets in the
aggregate. Investments in the securities of other investment companies involve
duplication of advisory fees and certain other expenses.
RATINGS -- The ratings of Moody's, S&P, Fitch and Duff represent their
opinions as to the quality of the obligations which they undertake to rate. It
should be emphasized, however, that ratings are relative and subjective and,
although ratings may be useful in evaluating the safety of interest and
principal payments, they do not evaluate the market value risk of such
obligations. Therefore, although these ratings may be an initial criterion for
selection of portfolio investments, WFNIA also evaluates such obligations and
the ability of their issuers to pay interest and principal. Each Master Series
relies on WFNIA's judgment, analysis and experience in evaluating the
creditworthiness of an issuer. In this evaluation, WFNIA takes into
consideration, among other things, the issuer's financial resources, its
sensitivity to economic conditions and trends, the quality of the issuer's
management and regulatory matters. It also is possible that a rating agency
might not timely change the rating on a particular issue to reflect subsequent
events. See "Description of the Funds -- Risk Considerations -- Fixed-Income
Securities."
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INVESTMENT TECHNIQUES
STOCK INDEX OPTIONS -- Each LifePath Master Series may purchase and write
(i.e., sell) put and call options on stock indices as a substitute for
comparable market positions in the underlying securities. A stock index
fluctuates with changes in the market values of the stocks included in the
index. The aggregate premiums paid on all options purchased may not exceed 20%
of a LifePath Master Series' total assets and the value of options written or
purchased may not exceed 10% of the value of a LifePath Master Series' total
assets.
The effectiveness of purchasing or writing stock index options depends upon
the extent to which price movements in the LifePath Master Series' portfolio
correlate with price movements of the stock index selected. Because the value of
an index option depends upon movements in the level of the index rather than the
price of a particular stock, whether a LifePath Master Series realizes a gain or
loss from purchasing or writing options on an index depends upon movements in
the level of stock prices in the stock market generally or, in the case of
certain indices, in an industry or market segment, rather than movements in the
price of a particular stock.
When a LifePath Master Series writes an option on a stock index, such
LifePath Master Series places in a segregated account with the Master
Portfolio's custodian cash or liquid securities in an amount at least equal to
the market value of the underlying stock index and maintains the account while
the option is open or otherwise covers the transaction.
FUTURES TRANSACTIONS -- IN GENERAL -- None of the LifePath Master Series
will be a commodity pool. To the extent permitted by applicable regulations,
each LifePath Master Series is permitted to use futures as a substitute for a
comparable market position in the underlying securities.
A futures contract is an agreement between two parties, a buyer and a
seller, to exchange a particular commodity at a specific price on a specific
date in the future. Futures contracts are traded on exchanges, where the
exchange serves as the ultimate counterparty for all contracts. Consequently,
the only credit risk on futures contracts is the creditworthiness of the
exchange. Futures contracts are, however, subject to market risk (i.e., exposure
to adverse price changes).
Each LifePath Master Series may trade futures contracts and may purchase
and write options on futures contracts in U.S. domestic markets, such as the
Chicago Board of Trade and the International Monetary Market of the Chicago
Mercantile Exchange, or, to the extent permitted under applicable law, on
exchanges located outside the United States, such
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as the London International Financial Futures Exchange, the Deutscher
Aktienindex and the Sydney Futures Exchange Limited. See "Description of the
Funds -- Risk Considerations -- Foreign Futures Transactions."
Each LifePath Master Series' futures transactions must constitute
permissible transactions pursuant to regulations promulgated by the CFTC. In
addition, a LifePath Master Series may not engage in futures transactions if the
sum of the amount of initial margin deposits and premiums paid for unexpired
options on futures contracts, other than those contracts entered into for bona
fide hedging purposes, would exceed 5% of the liquidation value of the Master
Series' assets, after taking into account unrealized profits and unrealized
losses on such contracts; provided, however, that in the case of an option that
is in-the-money at the time of purchase, the in-the-money amount may be excluded
in calculating this 5% liquidation limit. Pursuant to regulations and/or
published positions of the Securities and Exchange Commission, a LifePath Master
Series may be required to segregate cash or high quality money market
instruments in connection with its futures transactions in an amount generally
equal to the entire value of the underlying security.
Initially, when purchasing or selling futures contracts a LifePath Master
Series is required to deposit with the Portfolio's custodian in the broker's
name an amount of cash or cash equivalents up to approximately 10% of the
contract amount. This amount is subject to change by the exchange or board of
trade on which the contract is traded. Members of such exchange or board of
trade may impose their own higher requirements. This amount is known as "initial
margin" and is in the nature of a performance bond or good faith deposit on the
contract which is returned to the LifePath Master Series upon termination of the
futures position, assuming all contractual obligations have been satisfied.
Subsequent payments to and from the broker, known as "variation margin," are
made daily as the price of the index or securities underlying the futures
contract fluctuates, making the long and short positions in the futures contract
more or less valuable, a process known as "marking-to-market." At any time prior
to the expiration of a futures contract, the LifePath Master Series may elect to
close the position by taking an opposite position, at the then-prevailing price,
thereby terminating its existing position in the contract.
Although each LifePath Master Series may purchase or sell futures contracts
only if there is an active market for such contracts, no assurance can be given
that a liquid market will exist for any particular contract at any particular
time. Many futures exchanges and boards of trade limit the amount of fluctuation
permitted in futures contract prices during a single trading day. Once the daily
limit has been reached in a particular contract,
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no trades may be made that day at a price beyond that limit or trading may be
suspended for specified periods during the trading day. Futures contract prices
could move to the limit for several consecutive trading days with little or no
trading, thereby preventing prompt liquidation of futures positions and
potentially subjecting the relevant LifePath Master Series to substantial
losses. If it is not possible, or the LifePath Master Series determines not to
close a futures position in anticipation of adverse price movements, it will be
required to make daily cash payments of variation margin.
An option on a futures contract gives the purchaser the right, in return
for the premium paid, to assume a position in a futures contract (a long
position if the option is a call and a short position if the option is a put) at
a specified exercise price at any time during the option exercise period. The
writer (i.e., seller) of the option is required upon exercise to assume an
offsetting futures position (a short position if the option is a call and a long
position if the option is a put). Upon exercise of the option, the assumption of
offsetting futures positions by both the writer and the holder of the option
will be accompanied by delivery of the accumulated cash balance in the writer's
futures margin account in the amount by which the market price of the futures
contract, at exercise, exceeds (in the case of a call) or is less than (in the
case of a put) the exercise price of the option on the futures contract.
STOCK INDEX FUTURES AND OPTIONS ON STOCK INDEX FUTURES -- Each LifePath
Master Series may purchase and sell stock index futures contracts and options on
stock index futures contracts.
A stock index future obligates the seller to deliver (and the purchaser to
take), effectively, an amount of cash equal to a specific dollar amount times
the difference between the value of a specific stock index at the close of the
last trading day of the contract and the price at which the agreement is made.
No physical delivery of the underlying stocks in the index is made. With respect
to stock indices that are permitted investments, each LifePath Master Series
intends to purchase and sell futures contracts on the stock index for which it
can obtain the best price with consideration also given to liquidity.
INTEREST RATE FUTURES CONTRACTS AND OPTIONS ON INTEREST RATE FUTURES
CONTRACTS -- Each LifePath Master Series may invest in interest rate futures
contracts and options on interest rate futures contracts as a substitute for a
comparable market position in the underlying securities.
Each LifePath Master Series also may write options on interest rate futures
contracts as part of closing purchase transactions to terminate its
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options positions. No assurance can be given that such closing transactions can
be effected or concerning the degree of correlation between price movements in
the options on interest rate futures and price movements in the LifePath Master
Series' portfolio securities which are the subject of the transaction.
INTEREST RATE AND INDEX SWAPS -- Each LifePath Master Series may enter into
interest rate and index swaps in pursuit of its investment objective. Interest
rate swaps involve the exchange by a LifePath Master Series with another party
of their respective commitments to pay or receive interest (for example, an
exchange of floating-rate payments for fixed-rate payments). Index swaps involve
the exchange by a LifePath Master Series with another party of cash flows based
upon the performance of an index or a portion of an index (usually including
dividends or income). In each case, the exchange commitments can involve
payments to be made in the same currency or in different currencies.
Each LifePath Master Series usually enters into swaps on a net basis. In so
doing, only the net difference of the payment obligations is exchanged between
the counterparties. If a LifePath Master Series enters into a swap, it maintains
a segregated account in an amount equivalent to the gross value of its payment
obligations unless the contract provides otherwise. If the other party to such a
transaction defaults on a swap, the Master Series has contractual remedies
pursuant to the agreements related to the transaction. In such a case, the
LifePath Master Series' risk of loss consists of the net amount of payments that
the LifePath Master Series contractually is entitled to receive.
The use of interest rate and index swaps is a highly specialized activity
which involves investment techniques different from those associated with
ordinary portfolio security transactions. There is no limit, except as provided
below, on the amount of swap transactions that may be entered into by a Master
Series. These transactions generally do not involve the delivery of securities
or other underlying assets or principal. Accordingly, the risk of loss with
respect to swaps generally is limited to the net amount of payments that the
LifePath Master Series is contractually entitled to receive. No LifePath Master
Series invests more than 15% of the value of its net assets in swaps that are
illiquid, and in other illiquid securities.
FOREIGN CURRENCY TRANSACTIONS -- Each LifePath Master Series may engage in
currency exchange transactions either on a spot (i.e., cash) basis at the rate
prevailing in the currency exchange market, or by entering into forward
contracts to purchase or sell currencies. A forward currency exchange contract
involves an obligation between two parties to exchange a specific currency at a
set price on a future date, which must be more than
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two days from the date of the contract. These contracts are entered into in the
interbank market conducted directly between currency traders (typically
commercial banks or other financial institutions) and their customers.
Each LifePath Master Series may combine forward currency exchange contracts
with investments in securities denominated in other currencies.
Each LifePath Master Series also may maintain short positions in forward
currency exchange transactions, which would involve the Master Series agreeing
to exchange an amount of a currency it did not currently own for another
currency at a future date in anticipation of a decline in the value of the
currency sold relative to the currency such Master Series contracted to receive
in the exchange.
LENDING PORTFOLIO SECURITIES -- From time to time, each Master Series may
lend securities from its portfolio to brokers, dealers and other financial
institutions needing to borrow securities to complete certain transactions. Such
loans may not exceed one-third of the value of the relevant Master Series' total
assets. In connection with such loans, each Master Series receives collateral
consisting of cash, U.S. Government obligations or other high-quality debt
instruments which will be maintained at all times in an amount equal to at least
100% of the current market value of the loaned securities. Each Master Series
can increase its income through the investment of such collateral. Each Master
Series continues to be entitled to receive payments in amounts equal to the
dividends, interest and other distributions payable on the loaned security and
receives interest on the amount of the loan. Such loans are terminable at any
time upon specified notice. A Master Series might experience risk of loss if the
institution with which it has engaged in a portfolio loan transaction breaches
its agreement with such Master Series.
FORWARD COMMITMENTS -- Each Master Series may purchase securities on a
when-issued or forward commitment basis, which means that the price is fixed at
the time of commitment but delivery and payment ordinarily take place a number
of days after the date of the commitment to purchase. A Master Series makes
commitments to purchase such securities only with the intention of actually
acquiring the securities, but the Master Series may sell these securities before
the settlement date if it is deemed advisable. The Master Series will not accrue
income in respect of a security purchased on a forward commitment basis prior to
its stated delivery date.
Securities purchased on a when-issued or forward commitment basis and
certain other securities held in the Master Series' portfolio are subject to
changes in value (both generally changing in the same way, i.e., appreciating
when interest rates decline and depreciating when interest
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rates rise) based upon the public's perception of the creditworthiness of the
issuer and changes, real or anticipated, in the level of interest rates.
Securities purchased on a when-issued or forward commitment basis may expose the
relevant Master Series to risk because they may experience such fluctuations
prior to their actual delivery. Purchasing securities on a when-issued or
forward commitment basis can involve the additional risk that the yield
available in the market when the delivery takes place actually may be higher
than that obtained in the transaction itself. A segregated account of each
Master Series consisting of cash, U.S. Government obligations or other high
quality liquid debt securities at least equal at all times to the amount of the
when-issued or forward commitments is established and maintained at the Master
Portfolio's custodian bank. Purchasing securities on a forward commitment basis
when a Master Series is fully or almost fully invested may result in greater
potential fluctuation in the value of such Master Series' net assets and its net
asset value per share.
BORROWING MONEY -- As a fundamental policy, each Master Series is permitted
to borrow to the extent permitted under the 1940 Act. However, each Master
Series currently intends to borrow money only for temporary or emergency (not
leveraging) purposes, in an amount up to one-third of the value of its total
assets (including the amount borrowed) valued at the lesser of cost or market,
less liabilities (not including the amount borrowed) at the time the borrowing
is made. While borrowings exceed 5% of a Master Series' total assets, such
Master Series will not make any investments.
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SPONSOR, DISTRIBUTOR AND ADMINISTRATOR
Stephens Inc.
Little Rock, Arkansas
INVESTMENT ADVISER AND TRANSFER AGENT
Wells Fargo Bank, N.A.
San Francisco, California
SUB-INVESTMENT ADVISER
Wells Fargo Nikko Investment Advisors
San Francisco, California
CUSTODIAN
Wells Fargo Bank, N.A.
San Francisco, California
LEGAL COUNSEL
Morrison & Foerster
Washington, D.C.
INDEPENDENT AUDITORS
KPMG Peat Marwick LLP
San Francisco, California
For more information about the Funds write or call:
Stagecoach Funds
c/o Wells Fargo Bank, N.A. -- Transfer Agent
525 Market Street
San Francisco, California 94105
1-800-776-0179
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION, ANY STATE SECURITIES COMMISSION OR ANY OTHER REGULATORY
AUTHORITY, NOR HAVE ANY OF THE FOREGOING AUTHORITIES PASSED UPON THE ACCURACY OR
ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.
STLP 6/95
<PAGE> 117
STAGECOACH FUNDS
c/o Wells Fargo Bank, N.A.
Transfer Agent
525 Market Street
San Francisco, CA 94105
STLP 6/95
<PAGE> 118
- --------------------------------------------------------------------------------
STAGECOACH LIFEPATH(TM) FUNDS
LifePath 2000(TM) Fund
LifePath 2010(TM) Fund
LifePath 2020(TM) Fund
LifePath 2030(TM) Fund
LifePath 2040(TM) Fund
PART B
(STATEMENT OF ADDITIONAL INFORMATION)
JUNE 28, 1995
- --------------------------------------------------------------------------------
This Statement of Additional Information, which is not a prospectus,
supplements and should be read in conjunction with the current Prospectus of
the LifePath 2000 Fund, LifePath 2010 Fund, LifePath 2020 Fund, LifePath 2030
Fund and LifePath 2040 Fund (the "LifePath Funds" or the "Funds") of Stagecoach
Trust (the "Trust"), dated June 28, 1995, as it may be revised from time to
time. To obtain a copy of the Funds' Prospectus, please write to the Trust c/o
Wells Fargo Bank, N.A. -- Shareholder Services, P.O. Box 7033, San Francisco,
California 94120-9517, or call (800) 222-8222.
As described in the Prospectus, each Fund invests all of its assets in
a separate Master Series of Master Investment Portfolio (the "Master
Portfolio") having the same investment objective as the Fund bearing the
corresponding name. Wells Fargo Bank, N.A. ("Wells Fargo Bank") serves as
investment adviser and Wells Fargo Nikko Investment Advisors ("WFNIA") serves
as sub-investment adviser, respectively, to the Master Portfolio's Master
Series. Stephens Inc. ("Stephens") serves as the Trust's administrator and as
distributor of each Fund's shares.
This Statement of Additional Information applies to both classes of
shares of the LifePath Funds: the Institutional Class ("Institutional Shares")
and the Retail Class (the "Retail Shares"). Net asset value, total return and
yield quotations are computed separately for each class of Fund shares.
Because of the differences in the fees and expenses borne by the Retail Class
of the Funds, the return/yield on such shares can be expected, at any given
time, to be lower than the return/yield on Institutional Shares. Distributions
to the holders of the Retail Class are reduced by the amount of
distribution-related expenses payable under the Distribution Plan for the
Retail Class.
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TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
<S> <C>
Investment Objectives and Management Policies........... B-3
Management of the Trust................................. B-11
Management Arrangements ................................ B-14
Purchase and Redemption of Shares....................... B-17
Determination of Net Asset Value........................ B-17
Dividends, Distributions and Taxes...................... B-19
Capital Stock........................................... B-22
Performance Information................................. B-25
Portfolio Transactions.................................. B-26
Information About the Funds............................. B-27
Custodian, Transfer and Dividend Disbursing Agent....... B-28
Counsel................................................. B-28
Independent Auditors.................................... B-28
Financial Information................................... B-28
Appendix................................................ B-29
Financial Statements.................................... F-1
</TABLE>
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INVESTMENT OBJECTIVES AND MANAGEMENT POLICIES
General. Each Fund seeks to achieve its investment objective by
investing all of its assets in a corresponding Master Series of the Master
Portfolio. A Fund may withdraw its investment from such Master Series at any
time if the Trust's Board of Trustees determines that it is in the best
interest of the Fund to do so. Since the investment characteristics of a Fund
correspond directly to those of the relevant Master Series, the following is a
discussion of the various investment policies and techniques employed by each
corresponding LifePath Master Series.
Portfolio Securities
Bank Obligations. Domestic commercial banks organized under federal
law are supervised and examined by the Comptroller of the Currency and are
required to be members of the Federal Reserve System and to have their deposits
insured by the Federal Deposit Insurance Corporation (the "FDIC"). Domestic
banks organized under state law are supervised and examined by state banking
authorities but are members of the Federal Reserve System only if they elect to
join. In addition, state banks whose certificates of deposit ("CDs") may be
purchased by each Master Series are insured by the FDIC (although such
insurance may not be of material benefit to the Master Series, depending on the
principal amount of the CDs of each bank held by the Master Series) and are
subject to federal examination and to a substantial body of federal law and
regulation. As a result of federal or state laws and regulations, domestic
branches of domestic banks whose CDs may be purchased by each Master Series
generally are required, among other things, to maintain specified levels of
reserves, are limited in the amounts which they can loan to a single borrower
and are subject to other regulations designed to promote financial soundness.
However, not all of such laws and regulations apply to the foreign branches of
domestic banks.
Obligations of foreign branches of domestic banks, foreign subsidiaries
of domestic banks and domestic and foreign branches of foreign banks, such as
CDs and time deposits ("TDs"), may be general obligations of the parent banks
in addition to the issuing branch, or may be limited by the terms of a specific
obligation and/or governmental regulation. Such obligations are subject to
different risks than are those of domestic banks. These risks include foreign
economic and political developments, foreign governmental restrictions that may
adversely affect payment of principal and interest on the obligations, foreign
exchange controls and foreign withholding and other taxes on interest income.
These foreign branches and subsidiaries are not necessarily subject to the same
or similar regulatory requirements that apply to domestic banks, such as
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mandatory reserve requirements, loan limitations, and accounting, auditing and
financial record keeping requirements. In addition, less information may be
publicly available about a foreign branch of a domestic bank or about a foreign
bank than about a domestic bank.
Obligations of U.S. branches of foreign banks may be general
obligations of the parent bank in addition to the issuing branch, or may be
limited by the terms of a specific obligation or by federal or state regulation
as well as governmental action in the country in which the foreign bank has its
head office. A domestic branch of a foreign bank with assets in excess of $1
billion may be subject to reserve requirements imposed by the Federal Reserve
System or by the state in which the branch is located if the branch is licensed
in that state.
In addition, federal branches licensed by the Comptroller of the
Currency and branches licensed by certain states ("State Branches") may be
required to: (1) pledge to the appropriate regulatory authority, by depositing
assets with a designated bank within the relevant state, a certain percentage
of their assets as fixed from time to time by such regulatory authority; and
(2) maintain assets within the relevant state in an amount equal to a specified
percentage of the aggregate amount of liabilities of the foreign bank payable
at or through all of its agencies or branches within the state. The deposits of
federal and State Branches generally must be insured by the FDIC if such
branches take deposits of less than $100,000.
In view of the foregoing factors associated with the purchase of CDs
and TDs issued by foreign branches of domestic banks, by foreign subsidiaries
of domestic banks, by foreign branches of foreign banks or by domestic branches
of foreign banks, WFNIA carefully evaluates such investments on a case-by- case
basis.
Each Master Series may purchase CDs issued by banks, savings and loan
associations and similar thrift institutions with less than $1 billion in
assets, provided that such institutions are members of the FDIC, and further
provided such Master Series purchases any such CD in a principal amount of not
more than $100,000, which amount would be fully insured by the Bank Insurance
Fund or the Savings Association Insurance Fund administered by the FDIC.
Interest payments on such a CD are not insured by the FDIC. No Master Series
will own more than one such CD per such issuer.
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Management Policies
Stock Index Options. Each LifePath Master Series may purchase and
write put and call options on stock indices. Options on stock indices are
similar to options on stock except that (a) the expiration cycles of stock
index options are monthly, while those of stock options are currently
quarterly, and (b) the delivery requirements are different. Instead of giving
the right to take or make delivery of stock at a specified price, an option on
a stock index gives the holder the right to receive a cash "exercise settlement
amount" equal to (i) the amount, if any, by which the fixed exercise price of
the option exceeds, in the case of a put, or is less than, in the case of a
call, the closing value of the underlying index on the date of exercise,
multiplied by (ii) a fixed "index multiplier." Receipt of this cash amount
depends upon the closing level of the stock index upon which the option is
based being greater than, in the case of a call, or less than, in the case of a
put, the exercise price of the option. The amount of cash received is equal to
such difference between the closing price of the index and the exercise price
of the option expressed in dollars multiplied by a specified multiplier. The
writer of the option is obligated, in return for the premium received, to make
delivery of this amount. The writer may offset a position in stock index
options prior to expiration by entering into a closing transaction on an
exchange or the writer may let the option expire unexercised.
Futures Contracts and Options on Futures Contracts. The LifePath Master
Series may enter into futures contracts and may purchase and write options
thereon. Upon the exercise of an option on a futures contract, the writer of
the option delivers to the holder of the option the futures position and the
accumulated balance in the writer's futures margin account, which represents
the amount by which the market price of the futures contract exceeds, in the
case of a call, or is less than, in the case of a put, the exercise price of
the option on the futures contract. The potential loss related to the purchase
of options on futures contracts is limited to the premium paid for the option
(plus transaction costs). Because the value of the option is fixed at the time
of sale, there are no daily cash payments to reflect changes in the value of
the underlying contract; however, the value of the option may change daily and
that change would be reflected in the net asset value of the relevant LifePath
Master Series.
Foreign Currency Transactions. If a LifePath Master Series enters into
a foreign currency transaction or forward contract, such Master Series
deposits, if required by applicable regulations, with the Master Portfolio's
custodian cash or high-grade debt securities in a segregated account of the
LifePath Master Series in an amount at least equal to the
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value of the Master Series' total assets committed to the consummation of the
forward contract. If the value of the securities placed in the segregated
account declines, additional cash or securities is placed in the account so
that the value of the account equals the amount of the LifePath Master Series'
commitment with respect to the contract.
At or before the maturity of a forward contract, a LifePath Master
Series either may sell a portfolio security and make delivery of the currency,
or may retain the security and offset its contractual obligation to deliver the
currency by purchasing a second contract pursuant to which such Master Series
obtains, on the same maturity date, the same amount of the currency which it is
obligated to deliver. If the Master Series retains the portfolio security and
engages in an offsetting transaction, such Master Series, at the time of
execution of the offsetting transaction, incurs a gain or a loss to the extent
that movement has occurred in forward contract prices. Should forward prices
decline during the period between the Master Series' entering into a forward
contract for the sale of a currency and the date it enters into an offsetting
contract for the purchase of the currency, the Master Series realizes a gain to
the extent the price of the currency it has agreed to sell exceeds the price of
the currency it has agreed to purchase. Should forward prices increase, the
Master Series suffers a loss to the extent the price of the currency it has
agreed to purchase exceeds the price of the currency it has agreed to sell.
The cost to the LifePath Master Series of engaging in currency
transactions varies with factors such as the currency involved, the length of
the contract period and the market conditions then prevailing. Because
transactions in currency exchange usually are conducted on a principal basis,
no fees or commissions are involved. WFNIA considers on an ongoing basis the
creditworthiness of the institutions with which a LifePath Master Series enters
into foreign currency transactions. The use of forward currency exchange
contracts does not eliminate fluctuations in the underlying prices of the
securities, but it does establish a rate of exchange that can be achieved in
the future. If a devaluation generally is anticipated, the Master Series may
not be able to contract to sell the currency at a price above the devaluation
level it anticipates.
The purchase of options on currency futures allows a LifePath Master
Series, for the price of the premium it must pay for the option, to decide
whether or not to buy (in the case of a call option) or to sell (in the case of
a put option) a futures contract at a specified price at any time during the
period before the option expires.
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Future Developments. Each LifePath Master Series may take advantage of
opportunities in the areas of options and futures contracts and options on
futures contracts and any other derivative investments which are not presently
contemplated for use by such Master Series or which are not currently available
but which may be developed, to the extent such opportunities are both
consistent with a LifePath Master Series' investment objective and legally
permissible for the Master Series. Before entering into such transactions or
making any such investment, a LifePath Master Series would provide appropriate
disclosure in its Prospectus or this Part B.
Lending Portfolio Securities. To a limited extent, each Master Series
may lend its portfolio securities to brokers, dealers and other financial
institutions, provided it receives cash collateral which is maintained at all
times in an amount equal to at least 100% of the current market value of the
securities loaned. By lending its portfolio securities, a Master Series can
increase its income through the investment of the cash collateral or by receipt
of a loan premium from the borrower. For purposes of this policy, each Master
Series considers collateral consisting of U.S. Government obligations or
irrevocable letters of credit issued by banks whose securities meet the
standards for investment by such Master Series to be the equivalent of cash.
From time to time, a Master Series may return to the borrower, or to a third
party which is unaffiliated with the Master Portfolio, and which is acting as a
"placing broker," a part of the interest earned from the investment of
collateral received in exchange for securities loaned.
The Securities and Exchange Commission currently requires that the
following conditions must be met whenever portfolio securities are loaned: (1)
the Master Series must receive at least 100% cash collateral from the borrower;
(2) the borrower must increase such collateral whenever the market value of the
securities loaned rises above the level of such collateral; (3) the Master
Series must be able to terminate the loan at any time; (4) the Master Series
must receive reasonable interest on the loan, as well as any dividends,
interest or other distributions payable on the loaned securities, and any
increase in market value; (5) the Master Series may pay only reasonable
custodian fees in connection with the loan; and (6) while voting rights on the
loaned securities may pass to the borrower, the Master Portfolio's Board of
Trustees must terminate the loan and regain the right to vote the securities if
a material event adversely affecting the investment occurs. These conditions
may be subject to future modification.
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Investment Restrictions. Each Fund and Master Series has adopted
investment restrictions numbered 1 through 10 as fundamental policies. These
restrictions cannot be changed, as to a Fund or Master Series, without approval
by the holders of a majority (as defined in the Investment Company Act of 1940,
as amended (the "1940 Act")) of the outstanding voting securities of such Fund
or Master Series, as the case may be. Whenever a Fund is requested to vote on a
fundamental policy of the Master Series in which it invests, such Fund holds a
meeting of Fund shareholders and casts its votes as instructed by such Fund's
shareholders. Investment restrictions numbered 11 through 20 are not
fundamental policies and may be changed by vote of a majority of the Trustees
of the Trust or Master Portfolio, as the case may be, at any time. No Fund or
Master Series may:
1. Invest more than 5% of its assets in the obligations of any single
issuer, except that up to 25% of the value of its total assets may be invested,
and securities issued or guaranteed by the U.S. Government, or its agencies or
instrumentalities may be purchased, without regard to any such limitation.
2. Hold more than 10% of the outstanding voting securities of any
single issuer. This Investment Restriction applies only with respect to 75% of
its total assets.
3. Invest in commodities, except that each Fund or Master Series may
purchase and sell (i.e., write) options, forward contracts, futures contracts,
including those relating to indices and options on futures contracts or
indices.
4. Purchase, hold or deal in real estate, or oil, gas or other
mineral leases or exploration or development programs, but each Fund or Master
Series may purchase and sell securities that are secured by real estate or
issued by companies that invest or deal in real estate.
5. Borrow money, except to the extent permitted under the 1940 Act.
For purposes of this investment restriction, a Fund's or Master Series' entry
into options, forward contracts, futures contracts, including those relating to
indices and options on futures contracts or indices shall not constitute
borrowing to the extent certain segregated accounts are established and
maintained by the Fund or Master Series as described in the Prospectus.
6. Make loans to others, except through the purchase of debt
obligations and the entry into repurchase agreements. However, each Fund or
Master Series may lend its portfolio securities in an amount not to exceed
33-1/3% of the value of its total assets. Any loans of portfolio securities
will be
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made according to guidelines established by the Securities and Exchange
Commission and the Board of Trustees of the Trust or Master Portfolio, as the
case may be.
7. Act as an underwriter of securities of other issuers, except to
the extent the Fund or Master Series, as the case may be, may be deemed an
underwriter under the Securities Act of 1933, as amended, by virtue of
disposing of portfolio securities.
8. Invest 25% or more of its total assets in the securities of
issuers in any particular industry or group of closely related industries,
except that, in the case of each Fund or Master Series, there shall be no
limitation on the purchase of obligations issued or guaranteed by the U.S.
Government, its agencies or instrumentalities.
9. Issue any senior security (as such term is defined in Section
18(g) of the 1940 Act), except to the extent the activities permitted in
Investment Restriction Nos. 3, 5, 12 and 13 may be deemed to give rise to a
senior security or as otherwise permitted under the rules and regulations or an
exemptive order of the Securities & Exchange Commission.
10. Purchase securities on margin, but each Fund or Master Series may
make margin deposits in connection with transactions in options, forward
contracts, futures contracts, including those relating to indices, and options
on futures contracts or indices.
11. Invest in the securities of a company for the purpose of
exercising management or control, but each Fund or Master Series will vote the
securities it owns in its portfolio as a shareholder in accordance with its
views.
12. Pledge, mortgage or hypothecate its assets, except to the extent
necessary to secure permitted borrowings and to the extent related to the
purchase of securities on a when-issued or forward commitment basis and the
deposit of assets in escrow in connection with writing covered put and call
options and collateral and initial or variation margin arrangements with
respect to options, forward contracts, futures contracts, including those
relating to indices, and options on futures contracts or indices.
13. Purchase, sell or write puts, calls or combinations thereof,
except as may be described in the Funds' Prospectus and this Statement of
Additional Information.
14. Purchase securities of any company having less than three years'
continuous operations (including operations of any predecessors) if such
purchase would cause the value of
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<PAGE> 127
its investments in all such companies to exceed 5% of the value of its total
assets.
15. Enter into repurchase agreements providing for settlement in more
than seven days after notice or purchase securities which are illiquid, if, in
the aggregate, more than 15%, in the case of a LifePath Fund and LifePath
Master Series, of the value of its net assets would be so invested.
16. Purchase securities of other investment companies, except to the
extent permitted under the 1940 Act.
17. Purchase, hold or deal in real estate limited partnerships.
18. Purchase warrants that exceed 2% of the value of the Fund's or
Master Series' net assets, if those warrants are not listed on the New York or
American Stock Exchanges.
19. Purchase or retain securities of any issuer if the officers,
trustees of the Trust, its advisers or managers owning beneficially more than
one-half of one percent of the securities of an issuer together own
beneficially more than five percent of the securities of that issuer.
20. Engage in any short sales other than short sales against the box.
As a fundamental policy, each Fund may invest, notwithstanding any
other investment restriction (whether or not fundamental), all of its assets in
the securities of a single open-end management investment company with
substantially the same fundamental investment objectives, policies and
restrictions as such Fund.
If a percentage restriction is adhered to at the time of investment, a
later change in percentage resulting from a change in values or assets, except
with respect to compliance with Investment Restriction No. 5, will not
constitute a violation of such restriction.
The Trust may make commitments more restrictive than the restrictions
listed above so as to permit the sale of shares of a Fund in certain states.
Should the Trust determine that a commitment is no longer in the best interest
of the Fund and its shareholders, the Trust reserves the right to revoke the
commitment by terminating the sale of such Fund's shares in the state involved.
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<PAGE> 128
MANAGEMENT OF THE TRUST
Trustees and officers of the Trust, together with information as to
their principal business occupations during at least the last five years, are
shown below. The address of each, unless otherwise indicated, is 111 Center
Street, Little Rock, Arkansas 72201. Each Trustee who is deemed to be an
"interested person" of the Trust, as defined in the 1940 Act, is indicated by
an asterisk.
<TABLE>
<CAPTION>
Principal Occupations
Name, Address and Age Position During Past 5 Years
<S> <C> <C>
Jack S. Euphrat, 73 Trustee Private Investor.
415 Walsh Road
Atherton, CA 94027.
*R. Greg Feltus, 44 Trustee, Senior Vice President
Chairman and of Stephens; Manager
President of Financial Services
Group; President of
Stephens Insurance
Services Inc.; Senior
Vice President of
Stephens Sports
Management Inc.; and
President of
Investors Brokerage
Insurance Inc.
Thomas S. Goho, 53 Trustee Associate Professor
321 Beechcliff Court of Finance of the
Winston-Salem, NC 27104 School of Business
and Accounting at
Wake Forest
University since
1983. Financial
Planner and President
of Piedmont Financial
Planning since 1983.
*Zoe Ann Hines, 46 Trustee Senior Vice President
of Stephens and
Director of Brokerage
Accounting; and
Secretary of Stephens
Resource Management.
*W. Rodney Hughes, 69 Trustee Private Investor.
31 Dellwood Court
San Rafael, CA 94901
</TABLE>
B-11
<PAGE> 129
<TABLE>
<S> <C> <C>
Robert M. Joses, 77 Trustee Private Investor.
47 Dowitcher Way
San Rafael, CA 94901
*J. Tucker Morse, 51 Trustee Real Estate
10 Legrae Street Developer; Chairman
Charleston, SC 29401 of Renaissance
Properties Ltd.;
President of Morse
Investment
Corporation; and Co-
Managing Partner of
Main Street Ventures.
Richard H. Blank, Jr., 39 Chief Associate of
Operating Financial Services
Officer, Group of Stephens;
Secretary and Director of Stephens
Treasurer Sports Management
Inc.; and Director of
Capo Inc.
Larry W. Bowden, 41 Vice President Vice President of
Stephens and
Assistant Manager of
Financial Services
Group; Senior Vice
President of Stephens
Insurance Services
Inc.
Ellen M. Gray, 65 Vice President Senior Vice President
of Stephens and
Director of Investors
Brokerage Insurance
Inc. Prior thereto,
Senior Vice President
of Eppler, Guerin &
Turner, Inc.
E. Curtis Jeffries, 38 Vice President Associate of
-- Marketing Financial Services
Group of Stephens.
Prior thereto,
Account Supervisor of
Brooks-Pollard Co.
Jane G. Johnson, 41 Vice President Associate of
Financial Services
Group of Stephens.
</TABLE>
B-12
<PAGE> 130
<TABLE>
<S> <C> <C>
Michael W. Nolte, 34 Assistant Associate of
Secretary Financial Services
Group of Stephens.
Ann Bonsteel, 32 Assistant Associate of
Secretary Financial Services
Group of Stephens.
COMPENSATION TABLE
<CAPTION>
Total Compensation
Aggregate Compensation from Registrant
Name and Position from Registrant and Fund Complex
- ----------------- ---------------------- ------------------
<S> <C> <C>
Jack S. Euphrat 0 $34,188
Trustee
*R. Greg Feltus 0 0
Trustee
Thomas S. Goho 0 34,188
Trustee
*Zoe Ann Hines 0 0
Trustee
*W. Rodney Hughes 0 32,188
Trustee
Robert M. Joses 0 34,188
Trustee
*J. Tucker Morse 0 32,188
Trustee
</TABLE>
Each of the Trustees and officers of the Trust serves in an identical
capacity as an officer or Director of Overland Express Funds, Inc., Stagecoach
Inc. and Stagecoach Funds, Inc. (all of which consist of several separately
managed investment portfolios) and as a Trustee and/or officer of Life &
Annuity Trust, Master Investment Trust, Master Investment Portfolio and Managed
Series Investment Trust. All of these entities are open-end management
investment companies, and each is considered to be in the same "fund complex,"
as such term is defined in Form N-1A under the 1940 Act, as the Trust. Trustees
of the Trust who are not affiliated with Wells Fargo Bank or Stephens are
entitled to receive from the Trust for their services the amounts indicated
above and also are reimbursed for all out-of-pocket expenses
B-13
<PAGE> 131
relating to attendance at board meetings. Trustees who are affiliated with
Wells Fargo Bank or Stephens do not receive compensation from the Trust but are
reimbursed for all out-of-pocket expenses relating to attendance at meetings.
Currently the Trustees do not receive any retirement benefits or deferred
compensation from the Trust or any members of the Fund complex.
There ordinarily will be no meetings of shareholders for the purpose of
electing Trustees unless and until such time as less than a majority of the
Trustees holding office have been elected by shareholders, at which time the
Trustees then in office will call a shareholders' meeting for the election of
Trustees. Under the Trust's Amended and Restated Declaration of Trust (the
"Declaration of Trust"), shareholders of record of not less than two-thirds of
the outstanding shares of the Trust may remove a Trustee through a declaration
in writing or by vote cast in person or by proxy at a meeting called for that
purpose. Under the Trust's Declaration of Trust, the Trustees are required to
call a meeting of shareholders for the purpose of voting upon the question of
removal of any such Trustee when requested in writing to do so by the
shareholders of record of not less than 10% of the Trust's outstanding shares.
MANAGEMENT ARRANGEMENTS
Investment Advisory Agreement. Wells Fargo Bank provides investment
advisory services to each Master Series pursuant to the Investment Advisory
Agreement (the "Advisory Agreement") dated February 25, 1994 with the Master
Portfolio. As to each Master Series, the Advisory Agreement is subject to
annual approval by (i) the Master Portfolio's Board of Trustees or (ii) vote of
a majority (as defined in the 1940 Act) of the outstanding voting securities of
such Master Series, provided that in either event the continuance also is
approved by a majority of the Master Portfolio's Board of Trustees who are not
"interested persons" (as defined in the 1940 Act) of the Master Portfolio or
Wells Fargo Bank, by vote cast in person at a meeting called for the purpose of
voting on such approval. As to each Master Series, the Advisory Agreement is
terminable without penalty, on 60 days' written notice, by the Master
Portfolio's Board of Trustees or by vote of the holders of a majority of such
Master Series' shares, or, after the Reapproval Date (October 25, 1995), on not
less than 60 days' written notice, by Wells Fargo Bank. The Advisory Agreement
terminates automatically, as to the relevant Master Series, in the event of its
assignment (as defined in the 1940 Act).
For the fiscal year ended February 28, 1995, the corresponding Master
Series of each Fund paid to Wells Fargo Bank the advisory fees indicated below,
with no fee waivers:
B-14
<PAGE> 132
<TABLE>
<CAPTION>
Fees
Paid
<S> <C>
LifePath 2000 Master Series $217,676
LifePath 2010 Master Series $158,218
LifePath 2020 Master Series $252,413
LifePath 2030 Master Series $156,397
LifePath 2040 Master Series $189,121
</TABLE>
Sub-Investment Advisory Agreement. WFNIA provides sub-investment
advisory services to each Master Series pursuant to the Sub-Investment Advisory
Agreement (the "Sub-Advisory Agreement") dated February 25, 1994 with Wells
Fargo Bank. As to each Master Series, the Sub-Advisory Agreement is subject to
annual approval by (i) the Master Portfolio's Board of Trustees or (ii) vote of
a majority (as defined in the 1940 Act) of the outstanding voting securities of
such Master Series, provided that in either event the continuance also is
approved by a majority of the Master Portfolio's Board of Trustees who are not
"interested persons" (as defined in the 1940 Act) of the Master Portfolio or
WFNIA, by vote cast in person at a meeting called for the purpose of voting on
such approval. As to each Master Series, the Sub-Advisory Agreement is
terminable without penalty, on 60 days' written notice, by the Master
Portfolio's Board of Trustees or by vote of the holders of a majority of such
Master Series' shares, or, after the Reapproval Date (October 25, 1995), on not
less than 60 days' written notice, by WFNIA. The Sub-Advisory Agreement
terminates automatically, as to the relevant Master Series, in the event of its
assignment (as defined in the 1940 Act).
For the fiscal year ended February 28, 1995, Wells Fargo Bank paid to
WFNIA the sub-advisory fees indicated below, with no fee waivers:
<TABLE>
<CAPTION>
Fees
Paid
<S> <C>
LifePath 2000 Master Series $159,494
LifePath 2010 Master Series $115,647
LifePath 2020 Master Series $184,341
LifePath 2030 Master Series $114,426
LifePath 2040 Master Series $138,511
</TABLE>
Administration Agreement. The Trust has engaged Stephens to provide
certain administrative services. Pursuant to an Administration Agreement dated
February 25, 1994 with the Trust, Stephens furnishes the Trust clerical help
and accounting, data processing, bookkeeping, internal auditing and legal
services and certain other required services, prepares reports to the
shareholders, tax returns, reports to and
B-15
<PAGE> 133
filings with the Securities and Exchange Commission and state Blue Sky
authorities, calculates net asset value and generally supervises all aspects of
the Trust's operation, other than providing investment advice.
For the fiscal year ended February 28, 1995 the Funds paid
administrative fees to Stephens as follows:
<TABLE>
<CAPTION>
Fees Paid
<S> <C>
LifePath 2000 Fund $39,834
LifePath 2010 Fund $28,945
LifePath 2020 Fund $46,153
LifePath 2030 Fund $28,565
LifePath 2040 Fund $34,460
</TABLE>
Under the Administration Agreement, Stephens has agreed to assume the
operating expenses of each LifePath Fund and a pro rata share of the operating
expenses of each LifePath Master Series, except for expenses in connection with
securities' purchases, sales or other related transactions, extraordinary
expenses and fees and expenses payable pursuant to certain service contracts,
as described in the Prospectus.
Distribution Agreement. Stephens acts as the exclusive distributor of
each Fund's shares pursuant to a Distribution Agreement (the "Distribution
Agreement") dated February 25, 1994, with the Trust. Shares are sold on a
continuous basis by Stephens as agent, although Stephens is not obliged to sell
any particular amount of shares. No compensation is payable by the Trust to
Stephens for its distribution services, except for amounts payable with respect
to distribution-related activities relating to the Retail shares under the
Retail Shares Distribution Plan (as described in the Retail Shares Prospectus).
The term and termination provisions of the Distribution Agreement are
substantially similar to those of the Agreement with WFNIA discussed above.
For the fiscal year ended February 28, 1995, the Retail Shares of the
Funds paid to Stephens as compensation for distribution related services the
amounts listed below:
<TABLE>
<CAPTION>
Fees Paid
<S> <C>
LifePath 2000 Fund (Retail) $90,793
LifePath 2010 Fund (Retail) $57,878
LifePath 2020 Fund (Retail) $95,003
LifePath 2030 Fund (Retail) $59,699
LifePath 2040 Fund (Retail) $73,409
</TABLE>
Shareholder Services Agreement. Wells Fargo Bank acts as the
shareholder servicing agent ("Agent") for each Fund
B-16
<PAGE> 134
pursuant to a Shareholder Services Agreement (the "Agreement")
and the related Shareholder Services Plans. Wells Fargo Bank,
as agent, has agreed to perform certain shareholder liaison
services such as answering shareholder inquiries regarding
account status and history, and the manner in which purchases,
exchanges and redemptions of Fund shares may be made.
For the fiscal year ended February 28, 1995, each
class of the Funds paid shareholder services fees to Wells
Fargo Bank as follows:
<TABLE>
<CAPTION>
Retail Institutional Total
Fees Paid Fees Paid
<S> <C> <C> <C>
LifePath 2000 Fund $ 7,063 $72,606 $79,669
LifePath 2010 Fund $11,631 $46,259 $57,890
LifePath 2020 Fund $16,319 $75,988 $92,307
LifePath 2030 Fund $ 9,373 $47,758 $57,131
LifePath 2040 Fund $10,175 $58,746 $68,921
</TABLE>
PURCHASE AND REDEMPTION OF SHARES
Terms of Purchase. The Trust reserves the right to
reject any purchase order and to change the amount of the
minimum investment and subsequent purchases in the Funds.
Suspension of Redemptions. The right of redemption
may be suspended or the date of payment postponed (a) during
any period when the New York Stock Exchange ("NYSE") is closed
(other than customary weekend and holiday closing), (b) when
trading in the markets the Fund or Master Series normally
utilizes is restricted, or when an emergency exists as
determined by the Securities and Exchange Commission so that
disposal of such Fund's investments or determination of its net
asset value is not reasonably practicable, or (c) for such
other periods as the Securities and Exchange Commission by
order may permit to protect the Fund's shareholders.
DETERMINATION OF NET ASSET VALUE
LifePath Master Series. The securities of the LifePath Master Series,
including covered call options written by a LifePath Master Series, are valued
at the last sale price on the securities exchange or national securities market
on which such securities primarily are traded. Securities not listed on an
exchange or national securities market, or securities in which there were no
transactions, are valued at the most recent bid prices. Portfolio securities
which are traded primarily on foreign securities exchanges generally are valued
at the preceding closing values of such securities on
B-17
<PAGE> 135
their respective exchanges, except that when an occurrence subsequent to the
time a value was so established is likely to have changed such value, then the
fair value of those securities are determined by consideration of other factors
by or under the direction of the Master Portfolio's Board of Trustees or its
delegates. Short-term investments are carried at amortized cost, which
approximates market value. Any securities or other assets for which recent
market quotations are not readily available are valued at fair value as
determined in good faith by the Master Portfolio's Board of Trustees.
Restricted securities, as well as securities or other assets for which
market quotations are not readily available, or are not valued by a pricing
service approved by the Master Portfolio's Board of Trustees, are valued at
fair value as determined in good faith by or under the direction of the Master
Portfolio's Board of Trustees or its delegates. The Master Portfolio's Board
of Trustees reviews the method of valuation on a current basis. In making a
good faith valuation of restricted securities, the following are generally
considered: restricted securities that are, or are convertible into,
securities of the same class of securities for which a public market exists
usually are valued at market value less the same percentage discount at which
such securities were purchased. This discount may be revised periodically if
Wells Fargo Bank or WFNIA believes that the discount no longer reflects the
value of the restricted securities. Restricted securities not of the same
class as securities for which a public market exists usually are valued
initially at cost. Any subsequent adjustment from cost is based upon
considerations deemed relevant by or under the direction of the Master
Portfolio's Board of Trustees or its delegates.
Any assets or liabilities initially expressed in terms of foreign
currency are translated into dollars using information provided by pricing
entities, such as Morgan Stanley Capital International or Gelderman Data
Service, or at a quoted market exchange rate as may be determined to be
appropriate by WFNIA. Forward currency contracts are valued at the current
cost of offsetting the contract. Because of the need to obtain prices as of
the close of trading on various exchanges throughout the world, the calculation
of net asset value does not take place contemporaneously with the determination
of prices of the foreign securities held by the LifePath Master Series. In
addition, foreign securities held by a LifePath Master Series may be traded
actively in securities markets which are open for trading on days when the
Master Series does not determine its net asset value. Accordingly, there may be
occasions when a LifePath Master Series does not calculate its net asset value
but when the
B-18
<PAGE> 136
value of such Master Series' portfolio securities is affected by
such trading activity.
Fixed-income securities are valued each business day using available
market quotations or at fair value as determined by one or more independent
pricing services (collectively, the "Service") approved by the Master
Portfolio's Board of Trustees. The Service may use available market
quotations, employ electronic data processing techniques and/or a matrix system
to determine valuations. The Service's procedures are reviewed by the Master
Portfolio's officers under the general supervision of the Master Portfolio's
Board of Trustees.
Expenses and fees, including advisory fees, are accrued daily and are
taken into account for the purpose of determining the net asset value of each
LifePath Master Series' shares.
New York Stock Exchange Closings. The holidays on which the NYSE is
closed currently are: New Year's Day, Presidents' Day, Good Friday, Memorial
Day, Independence Day, Labor Day, Thanksgiving Day and Christmas Day.
DIVIDENDS, DISTRIBUTIONS AND TAXES
Each Fund intends to qualify each year as a "regulated investment
company" under the Internal Revenue Code of 1986, as amended (the "Code), so
long as such qualification is in the best interests of its shareholders. The
Master Series' assets, income and distributions are managed in such a way that
an investor in the Master Series itself is able to qualify as a regulated
investment company under the Code, assuming that the investor invests all of
its assets in the Master Series. Each Fund invests all of its assets in the
Master Series bearing the corresponding name.
To qualify as a regulated investment company, an entity must distribute
to its shareholders at least 90% of its net investment income and net
short-term capital gain, must derive less than 30% of its annual gross income
from gain on the sale of securities held for less than three months, and must
meet certain asset diversification and other requirements. Accordingly, a
regulated investment company may be restricted in the selling of securities
held for less than three months, and in the utilization of certain of the
investment techniques described in the Prospectus. The Code, however, allows a
regulated investment company to net certain offsetting positions making it
easier to satisfy the 30% test. Qualification as a regulated investment company
relieves the entity from any liability for federal income taxes to the
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<PAGE> 137
extent its earnings and capital gains are distributed in accordance with the
applicable provisions of the Code. The term "regulated investment company"
does not imply the supervision of management or investment practices or
policies by any government agency.
Any dividend or distribution paid shortly after an investor's purchase
of shares in a regulated investment company may have the effect of reducing the
aggregate net asset value of the investor's shares below the cost of the
investor's investment. Such a distribution would be a return on investment in
an economic sense although taxable as stated in "Dividends, Distributions and
Taxes" in the Prospectus. In addition, the Code provides that if a shareholder
holds shares of a regulated investment company for six months or less and has
received a capital gain dividend with respect to such shares, any loss incurred
on the sale of such shares are treated as a long-term capital loss to the
extent of the capital gain dividend received.
Depending on the composition of a regulated investment company's
income, dividends paid by the regulated investment company from net investment
income may qualify for the dividends received deduction allowable to certain
U.S. corporate shareholders ("dividends received deduction"). In general,
dividend income of the regulated investment company distributed to qualifying
corporate shareholders are eligible for the dividends received deduction only
to the extent that (i) the regulated investment company's income consists of
dividends paid by U.S. corporations and (ii) the regulated investment company
would have been entitled to the dividends received deduction with respect to
such dividend income if the regulated investment company were not a regulated
investment company under the Code. The dividends received deduction for
qualifying corporate shareholders may be further reduced if the shares of the
regulated investment company held by such shareholders with respect to which
dividends are received are treated as debt-financed or deemed to have been held
for less than 46 days. In addition, the Code provides other limitations with
respect to the ability of a qualifying corporate shareholder to claim the
dividends received deduction in connection with holding shares of a regulated
investment company.
An investor will recognize a gain or loss on the sale, redemption or
exchange of shares of a Fund. Pursuant to Section 1091 of the Code, all or a
portion of any loss so recognized may be disallowed if the investor purchases
other substantially identical shares within the 61 day period starting 30 days
before and ending 30 days after the sale, redemption or exchange of such
shares.
B-20
<PAGE> 138
Ordinarily, gains and losses realized from portfolio transactions are
treated as capital gain or loss. However, all or a portion of the gain or loss
from the disposition of non- U.S. dollar denominated securities (including debt
instruments, certain financial forward, futures and option contracts, and
certain preferred stock) may be treated as ordinary income or loss under
Section 988 of the Code (relating to the taxation of foreign currency
transactions). In addition, all or a portion of the gain realized from the
disposition of certain market discount bonds are treated as ordinary income
under Section 1276. Finally, all or a portion of the gain realized from
engaging in "conversion transactions" may be treated as ordinary income under
Section 1258. "Conversion transactions" are defined to include certain
forward, futures, option and straddle transactions, transactions marketed or
sold to produce capital gains, or transactions described in Treasury
regulations to be issued in the future.
Under the Code, gain or loss realized by a regulated investment company
from certain financial forward, futures and options transactions are treated as
60% long-term capital gain or loss and 40% short-term capital gain or loss.
Gain or loss arise upon the exercise or lapse of such forward contracts,
futures and options as well as from closing transactions. In addition, any
such forward contracts, futures or options remaining unexercised at the end of
the regulated investment company's taxable year are treated as sold for their
then fair market value, resulting in additional gain or loss to the regulated
investment company characterized in the manner described above.
Offsetting positions held by a regulated investment company involving
certain financial forward, futures or option contracts may be considered, for
tax purposes to constitute "straddles." "Straddles" are defined to include
"offsetting positions" in actively traded personal property. The tax treatment
of "straddles" is governed by Section 1092 of the Code which, in certain
circumstances, overrides or modifies the provisions of Section 1256.
If a regulated investment company were treated as entering into
"straddles" by reason of its engaging in certain financial forward, futures or
option contracts, such straddles are characterized as "mixed straddles" if the
futures, forwards, or options comprising a part of such straddles were governed
by Section 1256 of the Code. The regulated investment company may make one or
more elections with respect to "mixed straddles." Depending upon which
election is made, if any, the results with respect to the regulated investment
company may differ. Generally, to the extent the straddle rules apply to
positions established by the regulated investment company, losses realized by
the regulated investment company may be
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<PAGE> 139
deferred to the extent of unrealized gain in any offsetting positions.
Moreover, as a result of the straddle and the conversion transaction rules,
short-term capital loss on straddle positions may be recharacterized as
long-term capital loss and long-term capital gain may be characterized as
short-term capital gain or ordinary income.
Investment by a regulated investment company in securities issued or
acquired at a discount, or providing for deferred interest or for payment of
interest in the form of additional obligations could under special tax rules
affect the amount, timing and character of distributions to shareholders by
causing the regulated investment company to recognize income prior to the
receipt of cash payments. For example, the regulated investment company could
be required to accrue a portion of the discount (or deemed discount) at which
the securities were issued each year and to distribute such income in order to
maintain its qualification as a regulated investment company. In such case,
the regulated investment company may have to dispose of securities which it
might otherwise have continued to hold in order to generate cash to satisfy
these distribution requirements.
The foregoing discussion, and the discussions in the prospectus
applicable to each investor, address only some of the federal tax
considerations generally affecting investments in a Fund. Each investor is
urged to consult the investor's tax advisor regarding specific questions as to
federal, state or local taxes.
CAPITAL STOCK
As of June 9, 1995, the shareholders identified below were known by the
Company to own 5% or more of the indicated Fund's outstanding shares in the
following capacity:
<TABLE>
<CAPTION>
Name and Address Percentage Capacity
Name of Fund of Shareholder of Fund Owned
<S> <C> <C> <C>
LifePath 2000 Thrifty Payless, Inc. 13.97% Record
Fund Benefit Plan
(Institutional 9275 S.W. Peyton Lane
Class) Wilsonville, OR 97070
LifePath 2000 Wells Fargo & Co. 12.58% Record
Fund Benefit Plans
(Institutional 420 Montgomery Street
Class) San Francisco, CA 94104
</TABLE>
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<PAGE> 140
<TABLE>
<S> <C> <C> <C>
LifePath 2000 Dairyman's Co-Op Creamery 8.78% Record
Fund Benefit Plan
(Institutional 400 South M Street
Class) Pulore, CA 93274
LifePath 2000 Paracelsus Healthcare Corp. 8.38% Record
Fund Benefit Plan
(Institutional 155 North Lake Avenue
Class) Suite 1100
Pasadena, CA 91101
LifePath 2000 State Street Bank and Trust 7.72% Record
Fund Siemens Corp. Benefit Plan
(Institutional P.O. Box 1992 - MS D5
Class) Boston, MA 02105
LifePath 2000 Wyman-Gordon Co. 6.99% Record
Fund Benefit Plan
(Institutional P.O. Box 40456
Class) Houston, TX 77240-0456
LifePath 2000 Cosmair, Inc. 6.99% Record
Fund Benefit Plan
(Institutional 159 Terminal Avenue
Class) Clark, N.J. 07066
LifePath 2000 Yuasa-Exide, Inc. 5.59% Record
Fund Benefit Plan
(Institutional 2400 Bernville Road
Class) Reading, PA 19612-4145
LifePath 2010 Thrifty Payless, Inc. 13.77% Record
Fund Benefit Plan
(Institutional 9275 S.W. Peyton Lane
Class) Wilsonville, OR 97070
LifePath 2010 Wells Fargo & Co. 12.32% Record
Fund Benefit Plans
(Institutional 420 Montgomery Street
Class) San Francisco, CA 94104
LifePath 2010 Cosmair, Inc. 10.87% Record
Fund Benefit Plan
(Institutional 159 Terminal Avenue
Class) Clark, N.J. 07066
LifePath 2010 Paracelsus Healthcore Corp. 8.70% Record
Fund Benefit Plan
(Institutional 155 North Lake Avenue
Class) Suite 1100
Pasadena, CA 91101
</TABLE>
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<PAGE> 141
<TABLE>
<S> <C> <C> <C>
LifePath 2010 State Street Bank and Trust 8.54% Record
Fund Siemens Corp. Benefit Plan
(Institutional P.O. Box 1992 - MS D5
Class) Boston, MA 02105
LifePath 2010 Yuasa-Exide, Inc. 5.80% Record
Fund Benefit Plan
(Institutional 2400 Bemville Road
Class) Reading, PA 19612-4145
LifePath 2020 Cosmair, Inc. 19.67% Record
Fund Benefit Plan
(Institutional 159 Terminal Avenue
Class) Clark, N.J. 07066
LifePath 2020 Wells Fargo & Co. 18.09% Record
Fund Benefit Plans
(Institutional 420 Montgomery Street
Class) San Francisco, CA 94104
LifePath 2020 Syncor International Corp. 8.65% Record
Fund Benefit Plan
(Institutional 20001 Prarie Street
Class) Chatsworth, CA 91311
LifePath 2020 Paracelsus Healthcare Corp. 7.87% Record
Fund Benefit Plan
(Institutional 155 North Lake Avenue
Class) Suite 1100
Pasadena, CA 91101
LifePath 2020 Thrifty Payless, Inc. 7.08% Record
Fund Benefit Plan
(Institutional 9275 S.W. Peyton Lane
Class) Wilsonville, OR 97070
LifePath 2030 Wells Fargo & Co. 23.36% Record
Fund Benefit Plans
(Institutional 420 Montgomery Street
Class) San Francisco, CA 94104
LifePath 2030 Cosmair, Inc. 17.70% Record
Fund Benefit Plan
(Institutional 159 Terminal Avenue
Class) Clark, N.J. 07066
LifePath 2030 State Street Bank and Trust 13.31% Record
Fund Siemens Corp. Benefit Plan
(Institutional P.O. Box 1992 - MS D5
Class) Boston, MA 02105
LifePath 2030 Paracelsus Healthcare Corp. 7.79% Record
</TABLE>
B-24
<PAGE> 142
<TABLE>
<S> <C> <C> <C>
Fund Benefit Plan
(Institutional 155 North Lake Avenue
Class) Suite 1100
Pasadena, CA 91101
LifePath 2040 Wells Fargo & Co. 36.61% Record
Fund Benefit Plans
(Institutional 420 Montgomery Street
Class) San Francisco, CA 94104
LifePath 2040 Cosmair, Inc. 14.08% Record
Fund Benefit Plan
(Institutional 159 Terminal Avenue
Class) Clark, N.J. 07066
LifePath 2040 Paracelsus Healthcare Corp. 7.04% Record
Fund Benefit Plan
(Institutional 155 N. Lake Avenue
Class) Suite 1100
Pasadena, CA 91101
</TABLE>
PERFORMANCE INFORMATION
LifePath Funds. Average annual total return is calculated by
determining the ending redeemable value of an investment purchased with a
hypothetical $1,000 payment made at the beginning of the period (assuming the
reinvestment of dividends and distributions), dividing by the amount of the
initial investment, taking the "n"th root of the quotient (where "n" is the
number of years in the period) and subtracting 1 from the result.
Total return is calculated by subtracting the amount of the net asset
value per share at the beginning of a stated period from the net asset value
per share at the end of the period (after giving effect to the reinvestment of
dividends and distributions during the period), and dividing the result by the
net asset value per share at the beginning of the period.
Because of the difference in the fees and expenses borne by the Retail
Shares of the Funds, the return on such Shares can be expected, at any given
time, to be lower than the return on Institutional Shares.
For the fiscal period from March 1, 1994 (commencement of operations)
to February 28, 1995, the average annual total returns on the Funds were as
follows:
B-25
<PAGE> 143
<TABLE>
<CAPTION>
Retail Institutional
<S> <C> <C>
LifePath 2000 Fund 2.10% 2.38%
LifePath 2010 Fund 3.31% 3.53%
LifePath 2020 Fund 4.12% 4.39%
LifePath 2030 Fund 4.03% 4.42%
LifePath 2040 Fund 5.26% 5.55%
</TABLE>
For the fiscal period from March 1, 1994 (commencement of operations)
to February 28, 1995, the cumulative total returns on the Funds were as
follows:
<TABLE>
<CAPTION>
Retail Institutional
<S> <C> <C>
LifePath 2000 Fund 2.10% 2.38%
LifePath 2010 Fund 3.31% 3.53%
LifePath 2020 Fund 4.12% 4.39%
LifePath 2030 Fund 4.03% 4.42%
LifePath 2040 Fund 5.26% 5.55%
</TABLE>
From time to time, the Trust may use, in advertisements and other types
of literature, information and statements: (1) describing Wells Fargo Bank, and
its affiliates and predecessors, as one of the first investment managers to
advise investment accounts using asset allocation and index strategies; (2)
describing the Funds as the first mutual funds to offer a flexible investment
strategy designed to change over specific time horizons; (3) describing WFNIA
as one of the largest pension managers in the United States, managing over $150
billion in assets for Fortune 500 companies, governments and other institutions
around the world; and (4) describing WFNIA as an innovative pioneer in the
development of sophisticated investment strategies, including the Tactical
Asset Allocation Strategy, the Index Investing Strategy, and the LifePath
Strategy.
PORTFOLIO TRANSACTIONS
General. WFNIA assumes general supervision over placing orders on
behalf of the Master Portfolio for the purchase or sale of portfolio
securities. Allocation of brokerage transactions, including their frequency,
is made in the best judgment of WFNIA and in a manner deemed fair and
reasonable to shareholders. The primary consideration is prompt execution of
orders at the most favorable net price.
LifePath Master Series. Brokers also are selected
because of their ability to handle special executions such as
are involved in large block trades or broad distributions,
provided the primary consideration is met. Portfolio turnover
may vary from year to year, as well as within a year. High
B-26
<PAGE> 144
turnover rates over 100% are likely to result in comparatively greater
brokerage expenses. The overall reasonableness of brokerage commissions paid
is evaluated by WFNIA based upon its knowledge of available information as to
the general level of commissions paid by other institutional investors for
comparable services.
Purchases and sales of fixed-income securities usually are principal
transactions. Portfolio securities ordinarily are purchased directly from the
issuer or from an underwriter or market maker. Usually no brokerage
commissions are paid by the LifePath Master Series for such purchases and
sales. The prices paid to the underwriters of newly-issued securities usually
include a concession paid by the issuer to the underwriter, and purchases of
securities from market makers may include the spread between the bid and asked
price.
INFORMATION ABOUT THE FUNDS
Each Fund Share irrespective of class has one vote and, when issued and
paid for in accordance with the terms of the offering, is fully paid and
non-assessable. Shares have no preemptive, subscription or conversion rights
and are freely transferable. Each Share of a class has identical voting rights
with respect to the Fund of which it is a part provided that there are certain
matters which affect one class but not another. Currently, the only such
matter is the existence of a Distribution Plan pursuant to Rule 12b-1 under the
1940 Act with respect to the Retail Shares but not the Institutional Shares.
On this matter the shareholders of the affected class vote as a class.
Rule 18f-2 under the 1940 Act provides that any matter required to be
submitted under the provisions of the 1940 Act or applicable state law or
otherwise to the holders of the outstanding voting securities of an investment
company, such as the Trust, will not be deemed to have been effectively acted
upon unless approved by the holders of a majority of the outstanding shares of
each Fund affected by such matter. Rule 18f-2 further provides that a Fund
shall be deemed to be affected by a matter unless it is clear that the
interests of such Fund in the matter are identical or that the matter does not
affect any interest of such Fund. However, the Rule exempts the selection of
independent accountants and the election of Trustees from the separate voting
requirements of the Rule.
Each Fund sends annual and semi-annual financial statements to all its
shareholders of record.
B-27
<PAGE> 145
CUSTODIAN, TRANSFER AND DIVIDEND DISBURSING AGENT
Wells Fargo Bank acts as the Trust's transfer and dividend disbursing
agent and performs such services at 525 Market Street, San Francisco,
California 94105. Wells Fargo bank also acts as custodian of each Fund's
investments.
COUNSEL
Morrison & Forester, 2000 Pennsylvania Avenue, N.W., Suite 5500,
Washington, D.C. 20006, as counsel for the Trust, has rendered its opinion as
to certain legal matters regarding the due authorization and valid issuance of
the shares of beneficial interest being sold pursuant to the Funds' Prospectus.
INDEPENDENT AUDITORS
KPMG Peat Marwick LLP, Three Embarcadero Center, San Francisco,
California 94111, independent auditors, have been selected as each Fund's
independent auditors. KPMG Peat Marwick LLP provides audit services, tax
return preparation and assistance and consultation in connection with review of
certain Securities and Exchange Commission filings.
FINANCIAL INFORMATION
Attached as part of this Statement of Additional Information are the
audited financial statements and schedules for the Funds and each Fund's Master
Series dated February 28, 1995.
B-28
<PAGE> 146
APPENDIX
Description of certain ratings assigned by Standard & Poor's
Corporation ("S&P"), Moody's Investors Service, Inc. ("Moody's"), Fitch
Investors Service, Inc. ("Fitch"), Duff & Phelps, Inc. ("Duff") and IBCA Inc.
and IBCA Limited ("IBCA"):
S&P
Bond Ratings
AAA
Bonds rated AAA have the highest rating assigned by S&P. Capacity to
pay interest and repay principal is extremely strong.
AA
Bonds rated AA have a very strong capacity to pay interest and repay
principal and differ from the highest rated issues only in small degree.
A
Bonds rated A have a strong capacity to pay interest and repay
principal although they are somewhat more susceptible to the adverse effects of
changes in circumstances and economic conditions than obligations in higher
rated categories.
BBB
Bonds rated BBB are regarded as having an adequate capacity to pay
interest and repay principal. Whereas they normally exhibit adequate
protection parameters, adverse economic conditions or changing circumstances
are more likely to lead to a weakened capacity to pay interest and repay
principal for bonds in this category than for bonds in higher rated categories.
S&P's letter ratings may be modified by the addition of a plus (+) or
minus (-) sign designation, which is used to show relative standing within the
major rating categories, except in the AAA (Prime Grade) category.
Commercial Paper Rating
The designation A-1 by S&P indicates that the degree of safety
regarding timely payment is either overwhelming or very strong. Those issues
determined to possess overwhelming safety characteristics are denoted with a
plus sign (+) designation. Capacity for timely payment on issues with an A-2
B-29
<PAGE> 147
designation is strong. However, the relative degree of safety is not as high
as for issues designated A-1.
Moody's
Bond Ratings
Aaa
Bonds which are rated Aaa are judged to be of the best quality. They
carry the smallest degree of investment risk and are generally referred to as
"gilt edge." Interest payments are protected by a large or by an exceptionally
stable margin and principal is secure. While the various protective elements
are likely to change, such changes as can be visualized are most unlikely to
impair the fundamentally strong position of such issues.
Aa
Bonds which are rated Aa are judged to be of high quality by all
standards. Together with the Aaa group they comprise what generally are known
as high grade bonds. They are rated lower than the best bonds because margins
of protection may not be as large as in Aaa securities or fluctuation of
protective elements may be of greater amplitude or there may be other elements
present which make the long-term risks appear somewhat larger than in Aaa
securities.
A
Bonds which are rated A possess many favorable investment attributes
and are to be considered as upper medium grade obligations. Factors giving
security to principal and interest are considered adequate, but elements may be
present which suggest a susceptibility to impairment sometime in the future.
Baa
Bonds which are rated Baa are considered as medium grade obligations,
i.e., they are neither highly protected nor poorly secured. Interest payments
and principal security appear adequate for the present but certain protective
elements may be lacking or may be characteristically unreliable over any great
length of time. Such bonds lack outstanding investment characteristics and in
fact have speculative characteristics as well.
Moody's applies the numerical modifiers 1, 2 and 3 to show relative
standing within the major rating categories, except in the Aaa category. The
modifier 1 indicates a ranking
B-30
<PAGE> 148
for the security in the higher end of a rating category; the modifier 2
indicates a mid-range ranking; and the modifier 3 indicates a ranking in
the lower end of a rating category.
Commercial Paper Rating
The rating Prime-1 (P-1) is the highest commercial paper rating
assigned by Moody's. Issuers of P-1 paper must have a superior capacity for
repayment of short-term promissory obligations, and ordinarily will be
evidenced by leading market positions in well established industries, high
rates of return on funds employed, conservative capitalization structures with
moderate reliance on debt and ample asset protection, broad margins in earnings
coverage of fixed financial charges and high internal cash generation, and well
established access to a range of financial markets and assured sources of
alternate liquidity.
Issuers (or relating supporting institutions) rated Prime-2 (P-2) have
a strong capacity for repayment of short- term promissory obligations. This
ordinarily will be evidenced by many of the characteristics cited above but to
a lesser degree. Earnings trends and coverage ratios, while sound, will be
more subject to variation. Capitalization characteristics, while still
appropriate, may be more affected by external conditions. Ample alternate
liquidity is maintained.
Fitch
Bond Ratings
The ratings represent Fitch's assessment of the issuer's ability to
meet the obligations of a specific debt issue or class of debt. The ratings
take into consideration special features of the issue, its relationship to
other obligations of the issuer, the current financial condition and operative
performance of the issuer and of any guarantor, as well as the political and
economic environment that might affect the issuer's future financial strength
and credit quality.
AAA
Bonds rated AAA are considered to be investment grade and of the
highest credit quality. The obligor has an exceptionally strong ability to pay
interest and repay principal, which is unlikely to be affected by reasonably
foreseeable events.
B-31
<PAGE> 149
AA
Bonds rated AA are considered to be investment grade and of very high
credit quality. The obligor's ability to pay interest and repay principal is
very strong, although not quite as strong as bonds rated AAA. Because bonds
rated in the AAA and AA categories are not significantly vulnerable to
foreseeable future developments, short-term debt of these issuers is generally
rated F-1+.
A
Bonds rated A are considered to be investment grade and of high credit
quality. The obligor's ability to pay interest and repay principal is
considered to be strong, but may be more vulnerable to adverse changes in
economic conditions and circumstances than bonds with higher ratings.
BBB
Bonds rated BBB are considered to be investment grade and of
satisfactory credit quality. The obligor's ability to pay interest and repay
principal is considered to be adequate. Adverse changes in economic conditions
and circumstances, however, are more likely to have an adverse impact on these
bonds and, therefore, impair timely payment. The likelihood that the ratings
of these bonds will fall below investment grade is higher than for bonds with
higher ratings.
Plus (+) and minus (-) signs are used with a rating symbol to indicate
the relative position of a credit within the rating category.
Short-Term Ratings
Fitch's short-term ratings apply to debt obligations that are payable
on demand or have original maturities of up to three years, including
commercial paper, certificates of deposit, medium-term notes, and municipal and
investment notes.
Although the credit analysis is similar to Fitch's bond rating
analysis, the short-term rating places greater emphasis than bond ratings on
the existence of liquidity necessary to meet the issuer's obligations in a
timely manner.
F-1+
Exceptionally Strong Credit Quality. Issues assigned this rating are
regarded as having the strongest degree of assurance for timely payment.
B-32
<PAGE> 150
F-1
Very Strong Credit Quality. Issues assigned this rating reflect an
assurance of timely payment only slightly less in degree than issues rated
F-1+.
F-2
Good Credit Quality. Issues carrying this rating have a satisfactory
degree of assurance for timely payments, but the margin of safety is not as
great as the F-1+ and F-1 categories.
Duff
Bond Ratings
AAA
Bonds rated AAA are considered highest credit quality. The risk factors
are negligible, being only slightly more than for risk-free U.S. Treasury debt.
AA
Bonds rated AA are considered high credit quality. Protection factors
are strong. Risk is modest but may vary slightly from time to time because of
economic conditions.
A
Bonds rated A have protection factors which are average but adequate.
However, risk factors are more variable and greater in periods of economic
stress.
BBB
Bonds rated BBB are considered to have below average protection factors
but still considered sufficient for prudent investment. Considerable
variability in risk during economic cycles.
Plus (+) and minus (-) signs are used with a rating symbol (except AAA)
to indicate the relative position of a credit within the rating category.
Commercial Paper Rating
The rating Duff-1 is the highest commercial paper rating assigned by
Duff. Paper rated Duff-1 is regarded as having very high certainty of timely
payment with excellent liquidity factors which are supported by ample asset
B-33
<PAGE> 151
protection. Risk factors are minor. Paper rated Duff-2 is regarded as having
good certainty of timely payment, good access to capital markets and sound
liquidity factors and company fundamentals. Risk factors are small.
IBCA
Bond and Long-Term Ratings
Obligations rated AAA by IBCA have the lowest expectation of investment
risk. Capacity for timely repayment of principal and interest is substantial,
such that adverse changes in business, economic or financial conditions are
unlikely to increase investment risk significantly. Obligations for which there
is a very low expectation of investment risk are rated AA by IBCA. Capacity
for timely repayment of principal and interest is substantial. Adverse changes
in business, economic or financial conditions may increase investment risk
albeit not very significantly.
Commercial Paper and Short-Term Ratings
The designation A1 by IBCA indicates that the obligation is supported
by a very strong capacity for timely repayment. Those obligations rated A1+
are supported by the highest capacity for timely repayment. Obligations rated
A2 are supported by a strong capacity for timely repayment, although such
capacity may be susceptible to adverse changes in business, economic or
financial conditions.
International and U.S. Bank Ratings
An IBCA bank rating represents IBCA's current assessment of the
strength of the bank and whether such bank would receive support should it
experience difficulties. In its assessment of a bank, IBCA uses a dual rating
system comprised of Legal Ratings and Individual Ratings. In addition, IBCA
assigns banks Long- and Short-Term Ratings as used in the corporate ratings
discussed above. Legal Ratings, which range in gradation from 1 through 5,
address the question of whether the bank would receive support provided by
central banks or shareholders if it experienced difficulties, and such ratings
are considered by IBCA to be a prime factor in its assessment of credit risk.
Individual Ratings, which range in gradations from A through E, represent
IBCA's assessment of a bank's economic merits and address the question of how
the bank would be viewed if it were entirely independent and could not rely on
support from state authorities or its owners.
B-34
<PAGE> 152
STATEMENT OF ASSETS AND LIABILITIES
February 28, 1995
<TABLE>
<CAPTION>
LIFEPATH LIFEPATH LIFEPATH
2000 2010 2020
FUND FUND FUND
- ----------------------------------------------------------------------------------
<S> <C> <C> <C>
ASSETS
Investments:
In corresponding Master
Series, at market value
(Note 1) $60,312,597 $49,328,919 $81,933,300
Receivables:
Dividends and interest 533,314 358,536 491,442
Fund shares sold 1,336,688 152,250 309,890
Total Assets 62,182,599 49,839,705 82,734,632
LIABILITIES
Payables:
Fund shares redeemed 0 0 0
Due to sponsor and
distributor 36,883 25,461 43,738
Due to Wells Fargo Bank 29,575 22,688 37,382
Total Liabilities 66,458 48,149 81,120
TOTAL NET ASSETS $62,116,141 $49,791,556 $82,653,512
Net assets consist of:
Paid-in capital - Retail
class $54,129,643 $36,136,528 $63,834,565
Paid-in capital -
Institutional class 7,354,528 12,692,554 16,007,463
Undistributed net
investment income 472,022 314,113 416,342
Undistributed net realized
gain (loss) on
investments 114,639 83,416 31,741
Net unrealized
appreciation of
investments 45,309 564,945 2,363,401
TOTAL NET ASSETS $62,116,141 $49,791,556 $82,653,512
COMPUTATION OF NET ASSET
VALUE AND OFFERING PRICE
PER SHARE
Net Assets - Retail class $54,616,805 $36,763,683 $66,035,796
Shares outstanding - Retail
class 5,503,209 3,678,991 6,494,010
Net asset value and offering
price per share - Retail
class $9.92 $9.99 $10.17
Net Assets - Institutional
class $7,499,336 $13,027,873 $16,617,716
Shares outstanding -
Institutional class 754,459 1,299,540 1,634,490
Net asset value and offering
price per share -
Institutional class $9.94 $10.02 $10.17
</TABLE>
- ---------------------------------------------------------------------
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
8
<PAGE> 153
STATEMENT OF ASSETS AND LIABILITIES 2/28/95
<TABLE>
<CAPTION>
LIFEPATH LIFEPATH
2030 2040
FUND FUND
- -----------------------------------------------------------------
<S> <C> <C>
ASSETS
Investments:
In corresponding Master
Series, at market value
(Note 1) $50,425,647 $66,761,734
Receivables:
Dividends and interest 268,364 274,124
Fund shares sold 190,690 163,034
Total Assets 50,884,701 67,198,892
LIABILITIES
Payables:
Fund shares redeemed 0 420,060
Due to sponsor and
distributor 26,900 36,221
Due to Wells Fargo Bank 22,863 30,019
Total Liabilities 49,763 486,300
TOTAL NET ASSETS $50,834,938 $66,712,592
Net assets consist of:
Paid-in capital - Retail
class $39,469,433 $53,831,397
Paid-in capital -
Institutional class 9,276,241 9,500,629
Undistributed net
investment income 222,289 212,649
Undistributed net realized
gain (loss) on
investments (183,134) 38,771
Net unrealized
appreciation of
investments 2,050,109 3,129,146
TOTAL NET ASSETS $50,834,938 $66,712,592
COMPUTATION OF NET ASSET
VALUE AND OFFERING PRICE
PER SHARE
Net Assets - Retail class $41,153,295 $56,737,041
Shares outstanding - Retail
class 4,044,617 5,471,713
Net asset value and offering
price per share - Retail
class $10.17 $10.37
Net Assets - Institutional
class $9,681,643 $9,975,551
Shares outstanding -
Institutional class 950,599 961,668
Net asset value and offering
price per share -
Institutional class $10.18 $10.37
</TABLE>
- ---------------------------------------------------------------------
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
9
<PAGE> 154
STATEMENT OF OPERATIONS
For The Year Ended February 28, 1995
<TABLE>
<CAPTION>
LIFEPATH LIFEPATH LIFEPATH
2000 2010 2020
FUND FUND FUND
- ----------------------------------------------------------------------------------
<S> <C> <C> <C>
NET INVESTMENT INCOME
ALLOCATED FROM MASTER
SERIES
Dividends $172,305 $234,457 $630,985
Interest 2,157,324 1,391,008 1,611,548
Expenses (217,676) (158,218) (252,413)
Net Investment Income
Allocated from Master
Series 2,111,953 1,467,247 1,990,120
EXPENSES (NOTE 2)
Administration fees 39,834 28,945 46,153
Shareholder servicing fees 79,669 57,889 92,307
Transfer agency fees 39,834 28,945 46,153
Distribution fees - Retail
Class 90,793 57,878 95,003
Total Expenses 250,130 173,657 279,616
NET INVESTMENT INCOME 1,861,823 1,293,590 1,710,504
REALIZED AND UNREALIZED GAIN
(LOSS) ON INVESTMENTS
ALLOCATED FROM MASTER
SERIES
Net realized gain (loss) on
sale of investments 167,080 298,374 31,741
Net change in unrealized
appreciation of
investments 45,309 564,945 2,363,401
Net Gain On Investments 212,389 863,319 2,395,142
NET INCREASE IN NET ASSETS
RESULTING FROM OPERATIONS $2,074,212 $2,156,909 $4,105,646
</TABLE>
- ---------------------------------------------------------------------
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
10
<PAGE> 155
STATEMENT OF OPERATIONS 2/28/95
<TABLE>
<CAPTION>
LIFEPATH LIFEPATH
2030 2040
FUND FUND
- -----------------------------------------------------------------
<S> <C> <C>
NET INVESTMENT INCOME
ALLOCATED FROM MASTER
SERIES
Dividends $482,604 $772,325
Interest 822,159 456,448
Expenses (156,229) (189,121)
Net Investment Income
Allocated from Master
Series 1,148,534 1,039,652
EXPENSES (NOTE 2)
Administration fees 28,565 34,460
Shareholder servicing fees 57,131 68,921
Transfer agency fees 28,565 34,460
Distribution fees - Retail
Class 59,699 73,409
Total Expenses 173,960 211,250
NET INVESTMENT INCOME 974,574 828,402
REALIZED AND UNREALIZED GAIN
(LOSS) ON INVESTMENTS
ALLOCATED FROM MASTER
SERIES
Net realized gain (loss) on
sale of investments (183,134) 38,771
Net change in unrealized
appreciation of
investments 2,050,109 3,129,146
Net Gain On Investments 1,866,975 3,167,917
NET INCREASE IN NET ASSETS
RESULTING FROM OPERATIONS $2,841,549 $3,996,319
</TABLE>
- ---------------------------------------------------------------------
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
11
<PAGE> 156
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
LIFEPATH 2000 LIFEPATH 2010
FUND FUND
---------------- ----------------
FOR THE FOR THE
YEAR ENDED YEAR ENDED
FEBRUARY 28, FEBRUARY 28,
1995 1995
- ----------------------------------------------------------------
<S> <C> <C>
INCREASE IN NET ASSETS
Operations:
Net investment income $1,861,823 $1,293,590
Net realized gain (loss)
on sale of investments 167,080 298,374
Net change in unrealized
appreciation
(depreciation) of
investments 45,309 564,945
Net increase in net assets
resulting from operations 2,074,212 2,156,909
Distributions to
shareholders:
From net investment income
Retail class (1,272,285) (792,655)
Institutional class (117,516) (186,822)
From net realized gain on
sales of investments
Retail class (47,137) (164,665)
Institutional class (5,304) (50,293)
Capital shares transactions:
Proceeds from shares sold
- Retail class 79,821,113 44,016,587
Reinvestment of dividends
- Retail class 1,242,642 938,718
Cost of shares redeemed -
Retail class (26,934,112) (8,818,777)
Net increase in net assets
resulting from capital
share transactions - Retail
class 54,129,643 36,136,528
Proceeds from shares sold
- Institutional class 8,826,786 14,259,774
Reinvestment of dividends
- Institutional class 122,820 237,115
Cost of shares redeemed -
Institutional class (1,605,078) (1,814,335)
Net increase in net assets
resulting from capital
share transactions -
Institutional class 7,344,528 12,682,554
Increase In Net Assets 62,106,141 49,781,556
NET ASSETS:
Beginning net assets $10,000 $10,000
Ending net assets $62,116,141 $49,791,556
SHARES ISSUED AND REDEEMED:
Shares sold - Retail class 8,149,639 4,487,768
Shares issued in
reinvestment of
dividends - Retail class 129,306 97,829
Shares redeemed - Retail
class (2,775,736) (906,606)
Net increase in shares
outstanding - Retail class 5,503,209 3,678,991
Shares sold -
Institutional class 905,140 1,459,857
Shares issued in
reinvestment of
dividends -
Institutional class 12,783 24,706
Shares redeemed -
Institutional class (164,464) (186,023)
Net increase in shares
outstanding - Institutional
class 753,459 1,298,540
</TABLE>
- ---------------------------------------------------------------------
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
12
<PAGE> 157
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
LIFEPATH 2020 LIFEPATH 2030 LIFEPATH 2040
FUND FUND FUND
---------------- ---------------- ----------------
FOR THE FOR THE FOR THE
YEAR ENDED YEAR ENDED YEAR ENDED
FEBRUARY 28, FEBRUARY 28, FEBRUARY 28,
1995 1995 1995
- -----------------------------------------------------------------------------------
<S> <C> <C> <C>
INCREASE IN NET ASSETS
Operations:
Net investment income $1,710,504 $974,574 $828,402
Net realized gain (loss)
on sale of investments 31,741 (183,134) 38,771
Net change in unrealized
appreciation
(depreciation) of
investments 2,363,401 2,050,109 3,129,146
Net increase in net assets
resulting from operations 4,105,646 2,841,549 3,996,319
Distributions to
shareholders:
From net investment income
Retail class (1,059,929) (626,319) (515,015)
Institutional class (234,233) (125,966) (100,738)
From net realized gain on
sales of investments
Retail class 0 0 0
Institutional class 0 0 0
Capital shares transactions:
Proceeds from shares sold
- Retail class 76,248,722 46,409,294 63,522,813
Reinvestment of dividends
- Retail class 1,036,090 620,208 514,110
Cost of shares redeemed -
Retail class (13,450,247) (7,560,069) (10,205,526)
Net increase in net assets
resulting from capital
share transactions - Retail
class 63,834,565 39,469,433 53,831,397
Proceeds from shares sold
- Institutional class 19,610,472 10,945,015 11,844,340
Reinvestment of dividends
- Institutional class 234,233 125,966 100,738
Cost of shares redeemed -
Institutional class (3,847,242) (1,804,740) (2,454,449)
Net increase in net assets
resulting from capital
share transactions -
Institutional class 15,997,463 9,266,241 9,490,629
Increase In Net Assets 82,643,512 50,824,938 66,702,592
NET ASSETS:
Beginning net assets $10,000 $10,000 $10,000
Ending net assets $82,653,512 $50,834,938 $66,712,592
SHARES ISSUED AND REDEEMED:
Shares sold - Retail class 7,760,327 4,756,966 6,450,959
Shares issued in
reinvestment of
dividends - Retail class 107,008 64,274 52,581
Shares redeemed - Retail
class (1,373,325) (776,623) (1,031,827)
Net increase in shares
outstanding - Retail class 6,494,010 4,044,617 5,471,713
Shares sold -
Institutional class 2,005,382 1,121,285 1,198,550
Shares issued in
reinvestment of
dividends -
Institutional class 24,204 13,083 10,318
Shares redeemed -
Institutional class (396,096) (184,769) (248,200)
Net increase in shares
outstanding - Institutional
class 1,633,490 949,599 960,668
</TABLE>
- ---------------------------------------------------------------------
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
13
<PAGE> 158
FINANCIAL HIGHLIGHTS
For a share outstanding for the year ended February 28, 1995:
<TABLE>
<CAPTION>
LIFEPATH 2000 FUND LIFEPATH 2010 FUND
---------------------- ----------------------
INSTITUTIONAL RETAIL INSTITUTIONAL RETAIL
CLASS CLASS CLASS CLASS
----------- --------- ----------- ---------
<S> <C> <C> <C> <C>
Net Asset Value, beginning of period $ 10.00 $ 10.00 $ 10.00 $ 10.00
----------- --------- ----------- ---------
Income from investment operations:
Net investment income 0.35 0.34 0.33 0.34
Net realized and unrealized gain/(loss) on
investments (0.12) (0.14) 0.01 (0.02)
----------- --------- ----------- ---------
Total from investment operations 0.23 0.20 0.34 0.32
Less distributions:
Dividends from net investment income (0.28) (0.27) (0.27) (0.28)
Distributions from net realized capital gains (0.01) (0.01) (0.05) (0.05)
----------- --------- ----------- ---------
Total Distributions (0.29) (0.28) (0.32) (0.33)
----------- --------- ----------- ---------
Net Asset Value, end of Period $ 9.94 $ 9.92 $ 10.02 $ 9.99
----------- --------- ----------- ---------
----------- --------- ----------- ---------
Total Return (not annualized) 2.38% 2.10% 3.53% 3.31%
Ratios/Supplemental Data:
Net assets, end of period (000) $7,499 $ 54,617 $ 13,028 $ 36,764
Number of shares outstanding, end of period (000) 754 5,503 1,300 3,679
Ratios to average net assets (annualized):
Ratio of expenses to average net assets(1) 0.95% 1.20% 0.95% 1.20%
Ratio of net investment income to average net
assets(1) 4.89% 4.62% 4.61% 4.40%
Portfolio Turnover(2) -- -- -- --
- -----------------------------------------------------------------------------------------------------
(1) THIS RATIO INCLUDES EXPENSES CHARGED TO THE
MASTER SERIES.
(2) THE FUNDS INVEST ALL OF THEIR ASSETS IN THE
CORRESPONDING MASTER SERIES, HENCE NO
SECURITIES-RELATED ACTIVITY.
</TABLE>
14
<PAGE> 159
FINANCIAL HIGHLIGHTS (Continued)
For a share outstanding for the year ended February 28, 1995:
<TABLE>
<CAPTION>
LIFEPATH 2020 FUND LIFEPATH 2030 FUND
---------------------- ----------------------
INSTITUTIONAL RETAIL INSTITUTIONAL RETAIL
CLASS CLASS CLASS CLASS
----------- --------- ----------- ---------
<S> <C> <C> <C> <C>
Net Asset Value, beginning of period $ 10.00 $ 10.00 $ 10.00 $ 10.00
----------- --------- ----------- ---------
Income from investment operations:
Net investment income 0.30 0.28 0.29 0.26
Net realized gain/(loss) on investments 0.12 0.12 0.14 0.13
----------- --------- ----------- ---------
Total from investment operations 0.42 0.40 0.43 0.39
Less distributions:
Dividends from net investment income (0.25) (0.23) (0.25) (0.22)
Distributions from net realized capital gains 0.00 0.00 0.00 0.00
----------- --------- ----------- ---------
Total from distributions (0.25) (0.23) (0.25) (0.22)
----------- --------- ----------- ---------
Net Asset Value, end of period $ 10.17 $ 10.17 $ 10.18 $ 10.17
----------- --------- ----------- ---------
----------- --------- ----------- ---------
Total Return (not annualized) 4.39% 4.12% 4.42% 4.03%
Ratios/Supplemental Data:
Net assets, end of period (000) $ 16,618 $ 66,036 $ 9,682 $ 41,153
Number of shares outstanding, end of period (000) 1,634 6,494 951 4,045
Ratios to average net assets (annualized):
Ratio of expenses to average net assets(1) 0.95% 1.20% 0.95% 1.20%
Ratio of net investment income to average net
assets(1) 3.88% 3.64% 3.59% 3.35%
Portfolio Turnover(2) -- -- -- --
- -----------------------------------------------------------------------------------------------------
(1) THIS RATIO INCLUDES EXPENSES CHARGED TO THE
MASTER SERIES.
(2) THE FUNDS INVEST ALL OF THEIR ASSETS IN THE
CORRESPONDING MASTER SERIES, HENCE NO
SECURITIES-RELATED ACTIVITY.
</TABLE>
15
<PAGE> 160
FINANCIAL HIGHLIGHTS (Continued)
For a share outstanding for the year ended February 28, 1995:
<TABLE>
<CAPTION>
LIFEPATH 2040 FUND
----------------------
INSTITUTIONAL RETAIL
CLASS CLASS
----------- ---------
<S> <C> <C>
Net Asset Value, beginning of period $ 10.00 $ 10.00
----------- ---------
Income from investment operations:
Net investment income 0.20 0.18
Net realized gain/(loss) on investments 0.34 0.34
----------- ---------
Total from investment operations 0.54 0.52
Less distributions:
Dividends from net investment income (0.17) (0.15)
Distributions from net realized capital gains 0.00 0.00
----------- ---------
Total from distributions (0.17) (0.15)
----------- ---------
Net Asset Value, end of period $ 10.37 $ 10.37
----------- ---------
----------- ---------
Total Return (not annualized) 5.55% 5.26%
Ratios/Supplemental Data:
Net assets, end of period (000) $9,976 $ 56,737
Number of shares outstanding, end of period (000) 962 5,472
Ratios to average net assets (annualized):
Ratio of expenses to average net assets(1) 0.95% 1.20%
Ratio of net investment income to average net assets(1) 2.61% 2.35%
Portfolio Turnover(2) -- --
- ----------------------------------------------------------------------------------------------------
(1) THIS RATIO INCLUDES EXPENSES CHARGED TO THE MASTER SERIES.
(2) THE FUND INVESTS ALL OF ITS ASSETS IN THE CORRESPONDING MASTER SERIES,
HENCE NO SECURITIES-RELATED ACTIVITY.
</TABLE>
16
<PAGE> 161
STAGECOACH TRUST
NOTES TO THE FINANCIAL STATEMENTS
1. SIGNIFICANT ACCOUNTING POLICIES
ORGANIZATION. Stagecoach Trust (the "Trust") is registered under the
Investment Company Act of 1940 (the "1940 Act"), as amended, as an open-end
management investment company. The Trust was organized as a Massachusetts
business trust pursuant to an Agreement and Declaration of Trust dated May 14,
1993. The Trust currently is authorized to issue ten separate diversified funds,
of which the following commenced operations on March 1, 1994: the LifePath 2000
Fund, the LifePath 2010 Fund, the LifePath 2020 Fund, the LifePath 2030 Fund and
the LifePath 2040 Fund (the "Funds"). The following significant accounting
policies are consistently followed by the Trust in the preparation of its
financial statements, and such policies are in conformity with generally
accepted accounting principles for investment companies.
Each Fund offers two classes of shares, an Institutional Class and a Retail
Class. The two classes of shares differ principally in their respective
distribution fees. Shareholders of each class also bear certain expenses that
pertain to that particular class. All shareholders bear the common expenses of
the Fund and earn income from the portfolio, pro rata based on the average daily
net assets of each class. Dividends are declared separately for each class.
Gains are allocated to each class pro rata based upon net assets of each class
on the date of distribution. Neither class has preferential dividend rights;
differences in per share dividend rates are generally due to differences in
separate class expenses, including distribution fees and from the weightings of
pro rata income and gain allocations.
INVESTMENT POLICY AND SECURITY VALUATION
Each Fund invests all of its assets in a separate series (each, a "Master
Series") of Master Investment Portfolio. Each Master Series has the same
investment objective as the Fund bearing the corresponding name. The value of
each Fund's investment in its corresponding Master Series reflects that Fund's
interest in the net assets of that Master Series (99.98%, 99.98%, 99.99%,
99.96%, and 99.98%) for the LifePath 2000, LifePath 2010, LifePath 2020,
LifePath 2030 and LifePath 2040, respectively, at February 28, 1995. The Master
Series invest in a wide range of U.S. and foreign equity, debt securities and
money market instruments. Each Master Series follows an asset allocation
strategy among three
17
<PAGE> 162
STAGECOACH TRUST
NOTES TO THE FINANCIAL STATEMENTS
broad investment classes: equity and debt securities of issuers located
throughout the world and cash in the form of money market instruments. The
securities of the Master Series are valued at the last sale price on the primary
securities exchange or national securities market on which such securities are
traded. Securities not listed on an exchange or national securities market, or
securities in which there were no transactions, are valued at the most recent
bid prices. Debt securities maturing in 60 days or less are valued at amortized
cost, which approximates market value. Any securities, restricted securities or
other assets for which recent market quotations are not readily available are
valued at fair value as determined in good faith in accordance with policies
approved by the Master Portfolio's Board of Trustees.
SECURITY TRANSACTIONS AND REVENUE RECOGNITION
Securities transactions are accounted for by each Master Series on the date
the securities are purchased or sold (trade date). Revenue is recognized by each
Master Series as follows. Dividend income is recognized on the ex-dividend date,
and interest income is recognized on a daily accrual basis. Realized gains or
losses are reported on the basis of identified cost of securities delivered.
Bond discounts and premiums are amortized as required by the Internal Revenue
Code (the "Code").
All net investment income and realized and unrealized capital gains and
losses of each Master Series are allocated pro rata among its respective Funds
in the Master Series.
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS
Each Fund declares and pays dividends from net investment income quarterly.
Each Fund makes distributions from net realized securities gains, if any, once a
year.
FEDERAL INCOME TAXES
Each Fund of the Trust is treated as a separate entity for federal income
tax purposes. It is the policy of each Fund of the Trust to continue to qualify
as a regulated investment company by complying with the provisions applicable to
investment companies, as defined in the Code, and to make distributions of
18
<PAGE> 163
STAGECOACH TRUST
NOTES TO THE FINANCIAL STATEMENTS
investment company taxable income and net capital gain (after reduction for
capital loss carryforwards) sufficient to relieve it from all, or substantially
all, federal income taxes. Accordingly, no provision for federal income taxes
was required. As of February 28, 1995 the LifePath 2020 Fund has capital loss
carryforwards of $179,977 which will expire in the year 2002. The LifePath 2030
Fund has capital loss carryforwards of $311,585 which will expire in the year
2002 and the LifePath 2040 Fund has capital loss carryforwards of $32,220 which
will expire in the year 2002.
ORGANIZATION EXPENSES
Stephens Inc. ("Stephens"), the Funds' administrator, sponsor and
distributor, has incurred all expenses in connection with the Funds'
organization and initial registration.
2. AGREEMENTS AND OTHER TRANSACTIONS WITH AFFILIATES
The Trust has entered into an agreement on behalf of the Funds with Wells
Fargo Bank ("WFB") to provide transfer and dividend disbursing agency services.
For providing the transfer and dividend disbursing agency services, the Trust
has agreed to pay a monthly fee at the annual rate of 0.10% of each Fund's
average daily net assets.
The Trust may enter into (on behalf of the Funds) servicing agreements with
certain financial institutions, securities dealers and other industry
professionals (collectively, "Shareholder Servicing Agents") for the provision
of certain services to Fund shareholders. For the services provided pursuant to
a Shareholder Servicing Agreement, the Trust may pay each Shareholder Servicing
Agent a monthly fee at the annual rate of up to 0.20% of the average daily value
of each Fund's shares owned during the period for which payment is being made by
investors with whom the Shareholder Servicing Agent maintains a servicing
relationship. To date the Trust has entered into a Shareholder Servicing
Agreement only with WFB.
19
<PAGE> 164
STAGECOACH TRUST
NOTES TO THE FINANCIAL STATEMENTS
The Trust has entered into an agreement with Stephens on behalf of the
Retail Class of shares for distribution services and has adopted a Plan of
Distribution pursuant to Rule 12b-1 under the 1940 Act, whereby Stephens may be
compensated for services rendered and expenses incurred. For providing these
services, Stephens is entitled to compensation monthly at an annual rate of
0.25% of the average daily net assets of the Retail Class of shares.
The Trust has also entered into an administration agreement on behalf of the
Funds with Stephens whereby Stephens has agreed to provide administrative
services to the Funds. For providing administrative services, the Trust pays
Stephens a monthly fee at the annual rate of 0.10% of each Fund's average daily
net assets.
Under the Administration Agreement, Stephens has agreed to assume the
operating expenses of each LifePath Fund and a pro rata share of the operating
expenses of each LifePath Master Series, except for extraordinary expenses and
those fees and expenses payable pursuant to the various service contracts
described above which will be borne by the Trust and those expenses specifically
assumed by WFB under its contracts with the Funds.
Certain officers and directors of the Trust are also officers of Stephens.
At February 28, 1995, these officers of Stephens collectively owned less than 1%
of the Funds' outstanding shares.
3. CAPITAL SHARE TRANSACTIONS
As of February 28, 1995, the Trust has authorized an unlimited number of
shares of beneficial interest. Transactions in shares for the year ended
February 28, 1995, for each Fund are disclosed in detail in the Statements of
Changes in Net Assets.
20
<PAGE> 165
INDEPENDENT AUDITOR'S REPORT
To The Shareholders and Board of Trustees
Stagecoach Trust:
We have audited the accompanying statements of assets and liabilities of
Stagecoach Trust (comprising, respectively, LifePath 2000 Fund, LifePath 2010
Fund, LifePath 2020 Fund, LifePath 2030 Fund and LifePath 2040 Fund) as of
February 28, 1995, and the related statements of operations and changes in net
assets and financial highlights for the year then ended. These financial
statements and financial highlights are the responsibility of the Trust's
management. Our responsibility is to express an opinion on these financial
statements and financial highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included verification of securities owned as of
February 28, 1995, by examination and other appropriate audit procedures. An
audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the financial statements and financial highlights referred
to above present fairly, in all material respects, the financial position of
each of the aforementioned funds of Stagecoach Trust as of February 28, 1995,
the results of their operations, the changes in their net assets and their
financial highlights for the year then ended, in conformity with generally
accepted accounting principles.
/s/ KPMG PEAT MARWICK
SAN FRANCISCO, CALIFORNIA
APRIL 20, 1995
21
<PAGE> 166
MASTER INVESTMENT PORTFOLIO--LIFEPATH MASTER SERIES
FEBRUARY 28, 1995
Portfolios of Investments
<TABLE>
<CAPTION>
LIFEPATH 2000 LIFEPATH 2010 LIFEPATH 2020
---------------------------- ---------------------------- -------------
SECURITY NAME SHARES VALUE SHARES VALUE SHARES
<S> <C> <C> <C> <C> <C>
COMMON STOCKS
PERCENT OF NET ASSETS 20.3% 46.5%
LARGE CAPITALIZATION STOCKS
PERCENT OF NET ASSETS 9.1% 31.2%
Abbott Laboratories 661 $ 23,466 3,266 $ 115,943 8,294
Advanced Micro Devices + 238 7,229 460 13,973 1,156
Aetna Life & Casualty Co 272 14,620 538 28,918 1,364
Ahmanson (H F) & Co 280 5,145 570 10,474 1,483
Air Products & Chemicals Inc 275 13,544 541 26,644 1,353
Airtouch Communications + 438 11,936 1,991 54,255 5,119
Alberto-Culver Co Class B 48 1,368 115 3,278 398
Albertson's Inc 244 7,503 1,043 32,072 2,609
Alcan Aluminium Ltd 568 13,774 1,076 26,093 2,784
Alco Standard Corp 44 2,992 253 17,204 603
Alexander & Alexander Services 1 22 213 4,633 464
Allergan Inc 62 1,790 293 8,460 676
Allied Signal Inc 199 7,562 1,163 44,194 2,910
Alltel Corp 171 4,895 808 23,129 1,965
Aluminum Co of America 460 17,940 906 35,334 2,180
ALZA Corp + 118 2,685 369 8,395 873
Amdahl Corp 227 2,525 517 5,752 1,469
Amerada Hess Corp 238 11,662 460 22,540 1,107
American Brands Inc 503 18,800 993 37,113 2,437
American Electric Power Inc 448 15,176 918 31,097 2,253
American Express Corp 1,241 41,884 2,394 80,798 6,147
American General Corp 550 17,394 936 29,601 2,482
American Greetings Corp Class A 180 5,288 383 11,251 916
American Home Products Corp 244 17,446 1,201 85,872 3,195
American International Group Inc 206 21,373 1,312 136,120 3,268
American Stores Co 375 9,188 707 17,322 1,796
Ameritech Corp 1,383 59,296 2,669 114,433 6,644
Amgen Inc + 58 4,002 568 39,192 1,392
Amoco Corp 1,244 73,707 2,421 143,444 5,977
AMP Inc 59 4,425 402 30,150 1,073
AMR Corp + 183 11,186 360 22,005 923
Andrew Corp + 69 4,002 112 6,496 303
Anheuser-Busch Inc 166 9,358 1,086 61,223 2,695
Apple Computer Inc 280 11,060 570 22,515 1,414
Archer-Daniels-Midland Co 1,278 24,282 2,473 46,987 6,303
Armco Inc + 107 709 451 2,988 1,096
Armstrong World Industries Inc 90 4,118 204 9,333 418
ASARCO Inc 123 3,352 211 5,750 566
Ashland Inc 156 5,051 288 9,324 777
AT & T Corp 1,245 64,429 6,402 331,304 16,197
<CAPTION>
LIFEPATH 2020 LIFEPATH 2030 LIFEPATH 2040
------------- --------------------------- ----------------------------
SECURITY NAME VALUE SHARES VALUE SHARES VALUE
<S> <C> <C> <C> <C> <C>
COMMON STOCKS
PERCENT OF NET ASSETS 61.6% 73.8% 88.0%
LARGE CAPITALIZATION STOCKS
PERCENT OF NET ASSETS 47.2% 58.6% 73.7%
Abbott Laboratories $ 294,437 6,427 $ 228,159 12,265 $ 435,408
Advanced Micro Devices + 35,114 878 26,669 1,189 36,116
Aetna Life & Casualty Co 73,315 1,028 55,255 1,423 76,486
Ahmanson (H F) & Co 27,250 1,046 19,220 1,479 27,177
Air Products & Chemicals Inc 66,635 1,034 50,925 1,412 69,541
Airtouch Communications + 139,493 3,984 108,564 7,476 203,721
Alberto-Culver Co Class B 11,343 226 6,441 368 10,488
Albertson's Inc 80,227 1,996 61,377 3,852 118,449
Alcan Aluminium Ltd 67,512 2,008 48,694 2,899 70,301
Alco Standard Corp 41,004 427 29,036 795 54,060
Alexander & Alexander Services 10,092 339 7,373 649 14,116
Allergan Inc 19,520 472 13,629 971 28,038
Allied Signal Inc 110,580 2,311 87,818 4,314 163,932
Alltel Corp 56,248 1,471 42,107 2,841 81,324
Aluminum Co of America 85,020 1,668 65,052 2,374 92,586
ALZA Corp + 19,861 684 15,561 1,215 27,641
Amdahl Corp 16,343 1,110 12,349 1,494 16,621
Amerada Hess Corp 54,243 805 39,445 1,241 60,809
American Brands Inc 91,083 1,817 67,910 2,593 96,913
American Electric Power Inc 76,320 1,677 56,808 2,427 82,215
American Express Corp 207,461 4,638 156,533 6,394 215,798
American General Corp 78,493 1,872 59,202 2,707 85,609
American Greetings Corp Class A 26,908 657 19,299 941 27,642
American Home Products Corp 228,443 2,488 177,892 4,615 329,973
American International Group Inc 339,055 2,564 266,015 4,866 504,848
American Stores Co 44,002 1,270 31,115 1,888 46,256
Ameritech Corp 284,862 5,013 214,932 7,051 302,312
Amgen Inc + 96,048 1,110 76,590 2,047 141,243
Amoco Corp 354,137 4,545 269,291 6,387 378,430
AMP Inc 80,475 873 65,475 1,627 122,025
AMR Corp + 56,418 666 40,709 953 58,252
Andrew Corp + 17,574 199 11,542 423 24,534
Anheuser-Busch Inc 151,931 2,089 117,767 3,917 220,821
Apple Computer Inc 55,853 1,076 42,502 1,481 58,500
Archer-Daniels-Midland Co 119,757 4,730 89,870 6,562 124,678
Armco Inc + 7,261 775 5,134 1,569 10,395
Armstrong World Industries Inc 19,124 366 16,745 481 22,006
ASARCO Inc 15,424 407 11,091 539 14,688
Ashland Inc 25,155 554 17,936 743 24,055
AT & T Corp 838,195 12,502 646,979 23,706 1,226,786
</TABLE>
22 23
<PAGE> 167
MASTER INVESTMENT PORTFOLIO--LIFEPATH MASTER SERIES
FEBRUARY 28, 1995
Portfolios of Investments
<TABLE>
<CAPTION>
LIFEPATH 2000 LIFEPATH 2010 LIFEPATH 2020
---------------------------- ---------------------------- -------------
SECURITY NAME SHARES VALUE SHARES VALUE SHARES
<S> <C> <C> <C> <C> <C>
COMMON STOCKS (CONTINUED)
Atlantic Richfield Corp 405 $ 44,398 782 $ 85,727 1,955
Autodesk Inc 84 3,297 220 8,635 450
Automatic Data Processing 73 4,490 606 37,269 1,468
Avery Dennison Corp 148 5,550 282 10,575 632
Avon Products Inc 77 4,331 330 18,563 687
Baker Hughes Inc 371 7,142 654 12,590 1,733
Ball Corp 52 1,703 168 5,502 335
Bally Entertainment Corp + 107 829 293 2,271 422
Baltimore Gas & Electric Co 381 9,382 737 18,149 1,832
Banc One Corp 1,037 30,462 1,966 57,751 4,928
Bank of Boston Corp 260 7,833 528 15,906 1,349
BankAmerica Corp 921 44,323 1,810 87,106 4,480
Bankers Trust N Y Corp 190 11,994 366 23,104 963
Bard (C R) Inc 41 1,097 250 6,688 493
Barnett Banks Inc 245 10,903 492 21,894 1,175
Barrick Gold Corp 307 6,677 1,392 30,276 3,640
Bassett Furniture Industries 25 694 46 1,277 194
Bausch & Lomb Inc 154 5,121 286 9,510 640
Baxter International Inc 709 22,068 1,377 42,859 3,433
Becton Dickenson & Co 177 9,293 331 17,378 813
Bell Atlantic Corp 1,089 58,398 2,134 114,436 5,234
BellSouth Corp 1,244 73,396 2,421 142,839 5,985
Bemis Co Inc 40 1,085 249 6,754 567
Beneficial Corp 142 5,272 251 9,318 673
Bethlehem Steel Corp + 262 4,094 530 8,281 1,380
Beverly Enterprises + 220 2,860 371 4,823 1,014
Biomet Inc + 77 1,246 418 6,766 1,220
Black & Decker Corp 222 5,939 422 11,289 1,022
Block (H & R) Inc 61 2,295 429 16,141 1,050
Boatmen's Bancshares Inc 257 7,967 526 16,306 1,271
Boeing Co 846 39,022 1,645 75,876 4,165
Boise Cascade Corp 67 2,152 205 6,586 429
Boston Scientific Corp + 543 11,742 443 9,580 805
Briggs & Stratton Corp 50 1,738 142 4,935 360
Bristol-Myers Squibb Co 371 23,002 2,068 128,216 5,229
Brown Group Inc 31 1,000 76 2,451 230
Brown-Forman Corp Class B 171 5,536 325 10,522 837
Browning-Ferris Industries Inc 188 5,852 830 25,834 2,056
Bruno's Inc 162 1,650 363 3,698 857
Brunswick Corp 242 4,810 439 8,725 1,036
Burlington Northern Inc 31 1,736 354 19,824 870
Burlington Resources Inc 327 12,590 614 23,639 1,526
Campbell Soup Co 240 10,890 990 44,921 2,545
Capital Cities/ABC Inc 94 8,319 648 57,348 1,580
<CAPTION>
LIFEPATH 2020 LIFEPATH 2030 LIFEPATH 2040
------------- --------------------------- ----------------------------
SECURITY NAME VALUE SHARES VALUE SHARES VALUE
<S> <C> <C> <C> <C> <C>
Atlantic Richfield Corp $ 214,317 1,414 $ 155,010 2,128 $ 233,282
Autodesk Inc 17,663 34 13,345 68 26,690
Automatic Data Processing 90,282 1,146 70,479 2,134 131,241
Avery Dennison Corp 23,700 98 18,675 690 25,875
Avon Products Inc 38,644 521 29,306 1,097 61,706
Baker Hughes Inc 33,360 1,402 3,870 1,818 34,997
Ball Corp 10,971 228 7,467 383 12,543
Bally Entertainment Corp + 3,271 450 3,488 571 4,425
Baltimore Gas & Electric Co 45,113 1,333 32,825 1,912 47,083
Banc One Corp 144,760 3,668 107,748 5,281 155,129
Bank of Boston Corp 40,639 1,004 30,246 1,328 40,006
BankAmerica Corp 215,600 3,392 163,240 4,745 228,353
Bankers Trust N Y Corp 60,789 679 42,862 1,000 63,125
Bard (C R) Inc 13,188 376 10,058 761 20,357
Barnett Banks Inc 52,288 845 37,603 1,221 54,335
Barrick Gold Corp 79,170 2,823 61,400 5,356 116,493
Bassett Furniture Industries 5,384 116 3,219 199 5,522
Bausch & Lomb Inc 21,280 552 18,354 832 27,664
Baxter International Inc 106,852 2,609 81,205 3,608 112,299
Becton Dickenson & Co 42,683 638 33,495 900 47,250
Bell Atlantic Corp 280,673 3,989 213,910 5,663 303,678
BellSouth Corp 353,115 4,542 267,978 6,409 378,131
Bemis Co Inc 15,380 368 9,982 807 21,890
Beneficial Corp 24,985 514 19,082 634 23,537
Bethlehem Steel Corp + 21,563 1,006 15,719 1,433 22,391
Beverly Enterprises + 13,182 819 10,647 1,101 14,313
Biomet Inc + 19,749 902 14,601 1,701 27,535
Black & Decker Corp 27,339 718 19,207 1,053 28,168
Block (H & R) Inc 39,506 801 30,138 1,630 61,329
Boatmen's Bancshares Inc 39,401 996 30,876 1,323 41,013
Boeing Co 192,111 3,151 145,340 4,357 200,967
Boise Cascade Corp 13,782 377 12,111 491 15,773
Boston Scientific Corp + 17,408 549 11,872 928 20,076
Briggs & Stratton Corp 12,510 248 8,618 414 14,387
Bristol-Myers Squibb Co 324,198 4,127 255,874 7,758 480,996
Brown Group Inc 7,418 115 3,709 245 7,901
Brown-Forman Corp Class B 27,098 615 19,911 857 27,745
Browning-Ferris Industries Inc 63,993 1,584 49,302 2,954 91,943
Bruno's Inc 8,731 681 6,938 967 9,851
Brunswick Corp 20,591 820 16,298 1,288 25,599
Burlington Northern Inc 48,720 685 38,360 1,339 74,984
Burlington Resources Inc 58,751 1,172 45,122 1,694 65,219
Campbell Soup Co 115,479 1,956 88,754 3,739 169,657
Capital Cities/ABC Inc 139,830 1,236 109,386 2,308 204,258
</TABLE>
24 25
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FEBRUARY 28, 1995
Portfolios of Investments
<TABLE>
<CAPTION>
LIFEPATH 2000 LIFEPATH 2010 LIFEPATH 2020
---------------------------- ---------------------------- -------------
SECURITY NAME SHARES VALUE SHARES VALUE SHARES
<S> <C> <C> <C> <C> <C>
COMMON STOCKS (CONTINUED)
Carolina Power & Light Co 406 $ 11,165 784 $ 21,560 1,982
Caterpillar Inc 207 10,686 796 41,094 2,066
CBS Inc 5 323 295 19,028 640
Centex Corp 55 1,403 121 3,086 339
Central & South West Corp 481 11,845 899 22,138 2,374
Ceridian Corp + 27 851 214 6,741 470
Champion International Corp 238 9,788 460 18,918 1,108
Charming Shoppes Inc 205 1,256 549 3,363 1,149
Chase Manhattan Corp 448 16,072 818 29,346 2,253
Chemical Banking Corp Class A 642 25,760 1,142 45,823 2,983
Chevron Corp 1,642 77,995 3,172 150,670 7,869
Chrysler Corp 895 38,933 1,740 75,690 4,314
Chubb Corp 229 18,005 402 31,607 1,064
CIGNA Corp 176 13,332 330 24,998 912
Cincinnati Milacron Inc 59 1,239 174 3,654 292
Cinergy Corp 370 9,158 727 17,993 1,855
Circuit City Stores Inc 43 930 390 8,434 963
Cisco Systems Inc + 249 8,404 1,072 36,180 2,689
Citicorp 977 43,965 1,887 84,915 4,775
Clark Equipment Co + 31 1,659 75 4,013 209
Clorox Co 45 2,717 254 15,335 577
Coastal Corp 258 7,385 502 14,370 1,247
Coca-Cola Co 966 53,130 5,254 288,970 13,250
Colgate-Palmolive Co 83 5,354 589 37,991 1,536
Columbia Gas System Inc + 139 3,614 248 6,448 651
Columbia HCA Healthcare Corp 307 12,702 1,429 59,125 3,770
Comcast Corp Class A 193 3,040 946 14,900 2,431
Community Psychiatric Centers 101 1,174 163 1,895 488
Compaq Computer Corp + 242 8,349 1,066 36,777 2,650
Computer Associates International Inc 113 6,441 689 39,273 1,686
Computer Sciences Corp + 38 1,867 248 12,183 550
ConAgra Inc 234 7,664 985 32,259 2,515
Conrail Inc 190 10,498 366 20,222 965
Consolidated Edison Co 585 16,161 1,116 30,830 2,871
Consolidated Freightways 62 1,473 152 3,610 495
Consolidated Natural Gas Co 238 8,806 460 17,020 1,102
Continental Corp 122 2,364 230 4,456 663
Cooper Industries Inc 278 10,912 568 22,294 1,383
Cooper Tire & Rubber Co 21 588 322 9,016 822
Coors (Adolph) Co Class B 67 1,089 156 2,535 425
CoreStates Financial Corp 377 11,357 709 21,359 1,701
Corning Inc 161 5,172 874 28,077 2,330
CPC International Inc 87 4,655 643 34,401 1,514
Crane Co 52 1,567 168 5,061 336
<CAPTION>
LIFEPATH 2020 LIFEPATH 2030 LIFEPATH 2040
------------- --------------------------- ----------------------------
SECURITY NAME VALUE SHARES VALUE SHARES VALUE
Carolina Power & Light Co $ 54,505 1,417 $ 38,968 2,083 $ 57,283
Caterpillar Inc 106,657 1,632 84,252 3,060 157,973
CBS Inc 41,280 460 29,670 930 59,985
Centex Corp 8,645 234 5,967 344 8,772
Central & South West Corp 58,460 1,691 41,641 2,478 61,021
Ceridian Corp + 14,805 322 10,143 657 20,696
Champion International Corp 45,567 805 33,106 1,170 48,116
Charming Shoppes Inc 7,038 963 5,898 1,356 8,306
Chase Manhattan Corp 80,826 1,677 60,162 2,428 87,105
Chemical Banking Corp Class A 119,693 2,184 87,633 3,291 132,051
Chevron Corp 373,778 5,891 279,823 8,430 400,425
Chrysler Corp 187,659 3,253 141,506 4,549 197,882
Chubb Corp 83,657 783 61,563 1,185 93,171
CIGNA Corp 69,084 646 48,935 924 69,993
Cincinnati Milacron Inc 6,132 253 5,313 510 10,710
Cinergy Corp 45,911 1,381 34,180 2,648 65,538
Circuit City Stores Inc 20,825 738 15,959 1,416 30,621
Cisco Systems Inc + 90,754 2,073 69,964 3,873 130,714
Citicorp 214,875 3,604 162,180 4,973 223,785
Clark Equipment Co + 11,182 140 7,490 243 13,001
Clorox Co 34,836 420 25,358 851 51,379
Coastal Corp 35,695 972 27,824 1,325 37,928
Coca-Cola Co 728,750 10,287 565,785 19,537 1,074,535
Colgate-Palmolive Co 99,072 1,192 76,884 2,223 143,384
Columbia Gas System Inc + 16,926 472 12,272 701 18,226
Columbia HCA Healthcare Corp 155,984 2,875 118,953 5,459 225,866
Comcast Corp Class A 38,288 1,983 31,232 3,646 57,425
Community Psychiatric Centers 5,673 399 4,638 603 7,010
Compaq Computer Corp + 91,425 2,061 71,105 3,897 134,447
Computer Associates International Inc 96,102 1,329 75,753 2,411 137,427
Computer Sciences Corp + 27,019 457 22,450 751 36,893
ConAgra Inc 82,366 1,944 63,666 3,813 124,876
Conrail Inc 53,316 674 37,239 1,005 55,526
Consolidated Edison Co 79,311 2,171 59,974 3,021 83,455
Consolidated Freightways 11,756 362 8,598 421 9,999
Consolidated Natural Gas Co 40,774 805 29,785 1,169 43,253
Continental Corp 12,846 498 9,649 703 13,621
Cooper Industries Inc 54,283 1,090 42,783 1,523 59,778
Cooper Tire & Rubber Co 23,016 698 19,544 1,252 35,056
Coors (Adolph) Co Class B 6,906 344 5,590 543 8,824
CoreStates Financial Corp 51,243 1,270 38,259 1,895 57,087
Corning Inc 74,851 1,847 59,335 3,468 111,410
CPC International Inc 80,999 1,198 64,093 2,236 119,626
Crane Co 10,122 230 6,929 386 11,628
</TABLE>
26 27
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MASTER INVESTMENT PORTFOLIO--LIFEPATH MASTER SERIES
FEBRUARY 28, 1995
Portfolios of Investments
<TABLE>
<CAPTION>
LIFEPATH 2000 LIFEPATH 2010 LIFEPATH 2020
---------------------------- ---------------------------- -------------
SECURITY NAME SHARES VALUE SHARES VALUE SHARES
<S> <C> <C> <C> <C> <C>
COMMON STOCKS (CONTINUED)
Cray Research Inc + 46 $ 776 113 $ 1,907 279
Crown Cork & Seal Co + 230 9,804 454 19,352 1,075
CSX Corp 259 20,137 502 39,031 1,241
Cummins Engine Co Inc 123 5,597 210 9,555 540
Cyprus Amax Minerals 236 6,372 459 12,393 1,130
Dana Corp 248 6,107 493 12,140 1,271
Data General Corp + 62 488 152 1,197 380
Dayton-Hudson Corp 75 5,288 329 23,195 706
Dean Witter Discover & Co 424 17,119 823 33,229 2,064
Deere & Co 226 17,317 400 30,650 1,060
Delta Air Lines Inc 138 8,004 248 14,384 645
Deluxe Corp 120 3,360 320 8,960 895
Detroit Edison Co 382 10,935 689 19,723 1,809
Dial Corp 36 900 359 8,975 905
Digital Equipment Corp + 367 12,295 650 21,775 1,799
Dillard Department Stores Inc Class A 273 7,508 539 14,823 1,351
Disney (Walt) Co 441 23,538 2,130 113,689 5,540
Dominion Resources Inc 420 15,960 819 31,122 2,149
Donnelley (R R) & Sons Co 403 13,803 755 25,859 1,894
Dover Corp 50 2,975 183 10,889 637
Dow Chemical Co 682 45,694 1,350 90,450 3,354
Dow Jones & Co Inc 250 8,844 495 17,511 1,203
Dresser Industries Inc 157 3,238 780 16,088 1,902
DSC Communications Corp + 71 2,556 438 15,768 1,216
Duke Power Co 509 19,978 998 39,172 2,477
Dun & Bradstreet Corp 123 6,365 722 37,364 1,788
DuPont (E I) de Nemours 1,714 96,198 3,286 184,427 7,502
E-Systems Inc 84 3,675 174 7,613 387
Eastern Enterprises 37 976 80 2,110 216
Eastman Chemical Co 20 1,095 320 17,520 895
Eastman Kodak Co 229 11,679 1,405 71,655 3,458
Eaton Corp 83 4,160 260 13,033 754
Echlin Inc 153 5,298 286 9,903 740
Echo Bay Mines Ltd 271 2,439 538 4,842 1,415
Ecolab Inc 60 1,388 292 6,753 707
EG & G Inc 123 1,768 256 3,680 662
Emerson Electric Co 168 11,109 876 57,926 2,291
Engelhard Corp 43 1,134 389 10,260 938
Enron Corp 236 7,788 1,037 34,221 2,643
Enserch Corp 142 1,988 322 4,508 843
Entergy Corp 579 12,955 1,110 24,836 2,807
Exxon Corp 3,126 200,064 6,004 384,256 14,978
Federal Express Corp + 148 9,639 281 18,300 634
Federal Home Loan Mortgage Corp 441 25,578 862 49,996 2,169
<CAPTION>
LIFEPATH 2020 LIFEPATH 2030 LIFEPATH 2040
------------- --------------------------- ----------------------------
SECURITY NAME VALUE SHARES VALUE SHARES VALUE
<S> <C> <C> <C> <C> <C>
Cray Research Inc + $ 4,708 196 $ 3,308 303 $ 5,113
Crown Cork & Seal Co + 45,822 790 33,674 1,138 48,507
CSX Corp 96,488 996 77,439 1,326 103,097
Cummins Engine Co Inc 24,570 405 18,428 534 24,297
Cyprus Amax Minerals 30,510 802 21,654 1,164 31,428
Dana Corp 31,298 948 23,345 1,304 32,111
Data General Corp + 2,993 351 2,764 495 3,898
Dayton-Hudson Corp 49,773 545 38,423 1,090 76,845
Dean Witter Discover & Co 83,334 1,575 63,591 2,208 89,148
Deere & Co 81,223 827 63,369 1,164 89,192
Delta Air Lines Inc 37,410 457 26,506 651 37,758
Deluxe Corp 25,060 637 17,836 1,245 34,860
Detroit Edison Co 51,783 1,291 36,955 1,913 54,760
Dial Corp 22,625 702 17,550 1,361 34,025
Digital Equipment Corp + 60,267 1,329 44,522 1,731 57,989
Dillard Department Stores Inc Cla ss A 37,153 1,032 28,380 1,431 39,353
Disney (Walt) Co 295,698 4,253 227,004 8,114 433,085
Dominion Resources Inc 81,662 1,568 59,584 2,191 83,258
Donnelley (R R) & Sons Co 64,870 1,377 47,162 2,017 69,082
Dover Corp 37,902 447 26,597 823 48,969
Dow Chemical Co 224,718 2,480 166,160 3,574 239,458
Dow Jones & Co Inc 42,556 860 30,423 1,244 44,007
Dresser Industries Inc 39,229 1,465 30,216 2,759 56,904
DSC Communications Corp + 43,776 925 33,300 1,775 63,900
Duke Power Co 97,222 1,829 71,788 2,663 104,523
Dun & Bradstreet Corp 92,529 1,373 71,053 2,604 134,757
DuPont (E I) de Nemours 421,050 6,218 348,985 9,621 539,979
E-Systems Inc 16,931 358 15,663 406 17,763
Eastern Enterprises 5,697 173 4,563 272 7,174
Eastman Chemical Co 49,001 641 35,095 1,243 68,054
Eastman Kodak Co 176,358 2,712 138,312 5,135 261,885
Eaton Corp 37,794 566 28,371 1,174 58,847
Echlin Inc 25,623 557 19,286 729 25,242
Echo Bay Mines Ltd 12,735 1,084 9,756 1,470 13,230
Ecolab Inc 16,349 541 12,511 988 22,848
EG & G Inc 9,516 498 7,159 739 10,623
Emerson Electric Co 151,492 1,810 119,686 3,404 225,090
Engelhard Corp 24,740 738 19,465 1,491 39,325
Enron Corp 87,219 2,072 68,376 3,820 126,060
Enserch Corp 11,802 579 8,106 881 12,334
Entergy Corp 62,807 2,025 45,309 2,946 65,917
Exxon Corp 958,592 11,358 726,912 16,009 1,024,576
Federal Express Corp + 41,289 534 34,777 715 46,564
Federal Home Loan Mortgage Corp 125,802 1,640 95,120 2,342 135,836
</TABLE>
28 29
<PAGE> 170
MASTER INVESTMENT PORTFOLIO--LIFEPATH MASTER SERIES
FEBRUARY 28, 1995
Portfolios of Investments
<TABLE>
<CAPTION>
LIFEPATH 2000 LIFEPATH 2010 LIFEPATH 2020
---------------------------- ---------------------------- -------------
SECURITY NAME SHARES VALUE SHARES VALUE SHARES
<S> <C> <C> <C> <C> <C>
COMMON STOCKS (CONTINUED)
Federal National Mortgage Association 679 $ 52,368 1,322 $ 101,959 2,997
Federal Paper Board Co 124 3,689 211 6,277 541
First Chicago Corp 237 11,998 460 23,288 1,128
First Data Corp 73 3,924 422 22,683 1,097
First Fidelity Bancorp 215 10,858 366 18,483 965
First Interstate Bancorp 195 15,868 370 30,109 970
First Mississippi Corp 35 849 79 1,916 206
First Union Corp 423 18,876 823 36,726 2,163
Fleet Financial Group Inc 366 11,392 599 18,644 1,672
Fleetwood Enterprises Inc 130 2,844 241 5,272 597
Fleming Co Inc 65 1,268 204 3,978 492
Fluor Corp 19 926 319 15,551 894
FMC Corp + -- -- 153 8,951 416
Ford Motor Co 2,530 66,096 4,880 127,490 12,319
Foster Wheeler Corp -- -- 152 4,978 415
FPL Group Inc 483 17,328 901 32,323 2,301
Gannett Co Inc 83 4,565 589 32,395 1,458
Gap Inc 79 2,568 586 19,045 1,531
General Dynamics Corp 161 7,587 292 13,761 781
General Electric Co 1,322 72,545 7,010 384,674 17,670
General Mills Inc 103 6,244 680 41,225 1,650
General Motors Corp 1,880 80,135 3,657 155,880 9,074
General Public Utilities 287 8,682 557 16,849 1,409
General Re Corp 197 25,659 422 54,966 998
General Signal Corp 33 1,184 144 5,166 445
Genuine Parts Co 118 4,587 481 18,699 1,255
Georgia-Pacific Corp 33 2,471 356 26,656 972
Giant Food Inc Class A 154 3,658 287 6,816 771
Giddings & Lewis Inc 60 1,020 175 2,975 358
Gillette Co 162 12,818 871 68,918 2,324
Golden West Financial 162 6,197 293 11,207 783
Goodrich (B F) Co 45 2,003 112 4,984 303
Goodyear Tire & Rubber Co 390 14,381 745 27,472 1,869
Grace (W R) & Co 239 10,755 461 20,745 1,133
Grainger (W W) Inc 39 2,384 249 15,220 546
Great Atlantic & Pacific Tea Co 67 1,290 206 3,966 425
Great Lakes Chemical Corp 75 4,509 229 13,769 686
Great Western Financial Corp 357 6,694 618 11,588 1,659
GTE Corp 2,426 80,968 4,615 154,026 11,668
Halliburton Co 275 10,244 541 20,152 1,378
Handleman Co 59 627 124 1,318 352
Harcourt General Inc 86 3,193 263 9,764 777
Harland (John H) Co 53 1,199 69 1,561 302
Harnischfeger Industries Inc 108 3,011 209 5,826 576
<CAPTION>
LIFEPATH 2020 LIFEPATH 2030 LIFEPATH 2040
------------- --------------------------- ----------------------------
SECURITY NAME VALUE SHARES VALUE SHARES VALUE
<S> <C> <C> <C> <C> <C>
Federal National Mortgage Association $ 231,144 2,447 $ 188,725 3,819 $ 294,540
Federal Paper Board Co 16,095 407 12,108 537 15,976
First Chicago Corp 57,105 803 40,652 1,235 62,522
First Data Corp 58,964 917 49,289 1,648 88,580
First Fidelity Bancorp 48,733 781 39,441 982 49,591
First Interstate Bancorp 78,934 692 56,312 1,019 82,921
First Mississippi Corp 4,996 218 5,287 239 5,796
First Union Corp 96,524 1,578 70,418 2,253 100,540
Fleet Financial Group Inc 52,041 1,253 39,000 1,846 57,457
Fleetwood Enterprises Inc 13,059 451 9,866 562 12,294
Fleming Co Inc 9,594 371 7,235 482 9,399
Fluor Corp 43,583 640 31,200 1,245 60,694
FMC Corp + 24,336 263 15,386 574 33,579
Ford Motor Co 321,834 9,294 242,806 12,994 339,468
Foster Wheeler Corp 13,591 263 8,613 522 17,096
FPL Group Inc 82,548 1,654 59,337 2,486 89,185
Gannett Co Inc 80,190 1,089 59,895 2,070 113,850
Gap Inc 49,758 1,181 38,383 2,207 71,728
General Dynamics Corp 36,805 590 27,804 811 38,218
General Electric Co 969,641 13,699 751,733 25,995 1,426,476
General Mills Inc 100,031 1,303 78,994 2,370 143,681
General Motors Corp 386,779 6,845 291,768 9,648 411,246
General Public Utilities 42,622 1,034 31,279 1,491 45,103
General Re Corp 129,990 696 90,654 1,126 146,662
General Signal Corp 15,964 380 13,633 676 24,252
Genuine Parts Co 48,788 953 37,048 1,857 72,191
Georgia-Pacific Corp 72,779 698 52,263 1,346 100,782
Giant Food Inc Class A 18,311 523 12,421 758 18,003
Giddings & Lewis Inc 6,086 354 6,018 411 6,987
Gillette Co 183,887 1,740 137,678 3,375 267,047
Golden West Financial 29,950 573 21,917 767 29,338
Goodrich (B F) Co 13,484 274 12,193 308 13,706
Goodyear Tire & Rubber Co 68,919 1,427 52,621 1,993 73,492
Grace (W R) & Co 50,985 811 36,495 1,195 53,775
Grainger (W W) Inc 33,374 362 22,127 821 50,184
Great Atlantic & Pacific Tea Co 8,181 394 7,585 460 8,855
Great Lakes Chemical Corp 41,246 520 31,265 1,088 65,416
Great Western Financial Corp 31,106 1,201 22,519 1,742 32,663
GTE Corp 389,420 8,776 292,899 12,362 412,582
Halliburton Co 51,331 1,034 38,517 1,511 56,285
Handleman Co 3,740 297 3,156 405 4,303
Harcourt General Inc 28,846 670 24,874 1,187 44,067
Harland (John H) Co 6,833 196 4,435 488 11,041
Harnischfeger Industries Inc 16,056 424 11,819 539 15,025
</TABLE>
30 31
<PAGE> 171
MASTER INVESTMENT PORTFOLIO--LIFEPATH MASTER SERIES
FEBRUARY 28, 1995
Portfolios of Investments
<TABLE>
<CAPTION>
LIFEPATH 2000 LIFEPATH 2010 LIFEPATH 2020
---------------------------- ---------------------------- -------------
SECURITY NAME SHARES VALUE SHARES VALUE SHARES
<S> <C> <C> <C> <C> <C>
COMMON STOCKS (CONTINUED)
Harris Corp 95 $ 4,275 208 $ 9,360 527
Hartmarx Corp + 81 466 222 1,277 274
Hasbro Inc 229 7,214 403 12,695 989
Heinz (H J) Co 216 8,505 991 39,021 2,523
Helmerich & Payne Inc 43 1,118 136 3,536 257
Hercules Inc 88 3,861 427 18,735 1,165
Hershey Foods Corp 229 11,221 402 19,698 1,039
Hewlett Packard Co 243 27,945 1,018 117,070 2,608
Hilton Hotels Corp 34 2,389 145 10,186 506
Home Depot Inc 335 15,033 1,876 84,186 4,669
Homestake Mining Co 166 2,573 549 8,510 1,422
Honeywell Inc 329 11,967 615 22,371 1,625
Household International Inc 241 10,544 462 20,213 1,140
Houston Industries Inc 329 12,584 615 23,524 1,626
Illinois Tool Works Inc 74 3,321 440 19,745 1,126
Inco Ltd 279 7,498 569 15,292 1,482
Ingersoll-Rand Co 260 8,288 528 16,830 1,343
Inland Steel Industries Inc + 97 2,789 235 6,756 588
Intel Corp 358 28,551 1,658 132,226 4,323
Intergraph Corp + 104 1,274 191 2,340 502
International Business Machines Corp 1,469 110,542 2,845 214,086 7,135
International Flavors & Fragrances 71 3,417 438 21,079 1,122
International Paper Co 292 22,302 580 44,298 1,479
Interpublic Group Cos Inc 82 2,798 359 12,251 747
ITT Corp 281 27,398 471 45,923 1,290
James River Corp 218 5,368 369 9,087 1,013
Jefferson-Pilot Corp 136 7,752 247 14,079 635
Johnson & Johnson 527 29,907 2,634 149,480 6,610
Johnson Controls Inc 96 4,776 209 10,398 529
Jostens Inc 5 104 191 3,987 467
K Mart Corp 1,084 13,821 2,104 26,826 5,610
Kaufman & Broad Home Corp 57 834 122 1,784 330
Kellogg Co 169 9,147 877 47,468 2,292
Kerr-McGee Corp 141 7,103 250 12,594 647
KeyCorp 623 18,067 1,176 34,104 2,689
Kimberly-Clark Corp 107 5,564 684 35,568 1,683
King World Productions + -- -- 104 3,705 393
Knight-Ridder Inc 145 7,957 254 13,938 703
Kroger Co + 65 1,706 482 12,653 1,207
Lilly (Eli) & Co 238 15,946 1,200 80,400 3,011
Limited Inc 286 5,005 1,453 25,428 3,670
Lincoln National Corp 240 9,690 437 17,644 1,159
Liz Claiborne Inc 188 3,032 365 5,886 981
Lockheed Corp 160 12,420 291 22,589 806
<CAPTION>
LIFEPATH 2020 LIFEPATH 2030 LIFEPATH 2040
------------- --------------------------- ----------------------------
SECURITY NAME VALUE SHARES VALUE SHARES VALUE
<S> <C> <C> <C> <C> <C>
Harris Corp $ 23,715 397 $ 17,865 496 $ 22,320
Hartmarx Corp + 1,576 343 1,972 402 2,312
Hasbro Inc 31,154 838 26,397 1,186 37,359
Heinz (H J) Co 99,343 1,960 77,175 3,711 146,121
Helmerich & Payne Inc 6,682 208 5,408 296 7,696
Hercules Inc 51,114 906 39,751 1,833 80,423
Hershey Foods Corp 50,911 764 37,436 1,084 53,116
Hewlett Packard Co 299,920 2,035 234,025 3,903 448,845
Hilton Hotels Corp 35,547 350 24,588 780 54,795
Home Depot Inc 209,521 3,587 160,967 6,825 306,272
Homestake Mining Co 22,041 1,128 17,484 2,044 31,682
Honeywell Inc 59,109 1,177 42,813 1,710 62,201
Household International Inc 49,875 834 36,488 1,180 51,625
Houston Industries Inc 62,195 1,202 45,977 1,651 63,151
Illinois Tool Works Inc 50,529 932 41,824 1,730 77,634
Inco Ltd 39,829 1,098 29,509 1,477 39,694
Ingersoll-Rand Co 42,808 998 31,811 1,327 42,298
Inland Steel Industries Inc + 16,905 429 12,334 561 16,129
Intel Corp 344,759 3,348 267,003 6,266 499,714
Intergraph Corp + 6,150 397 4,863 616 7,546
International Business Machines Corp 536,909 5,369 404,017 7,470 562,118
International Flavors & Fragrances 53,996 932 44,853 1,680 80,850
International Paper Co 112,959 1,146 87,526 1,635 124,873
Interpublic Group Cos Inc 25,491 659 22,488 1,166 39,790
ITT Corp 125,775 998 97,305 1,485 144,788
James River Corp 24,945 789 19,429 1,085 26,718
Jefferson-Pilot Corp 36,195 457 26,049 614 34,998
Johnson & Johnson 375,118 5,133 291,298 9,719 551,553
Johnson Controls Inc 26,318 404 20,099 503 25,024
Jostens Inc 9,749 445 9,289 661 13,798
K Mart Corp 71,528 4,146 52,862 5,904 75,276
Kaufman & Broad Home Corp 4,826 334 4,885 449 6,567
Kellogg Co 124,055 1,762 95,368 3,403 184,187
Kerr-McGee Corp 32,593 464 23,374 657 33,096
KeyCorp 77,981 2,223 64,467 3,419 99,151
Kimberly-Clark Corp 87,516 1,317 68,484 2,437 126,724
King World Productions + 14,001 266 9,476 579 20,627
Knight-Ridder Inc 38,577 521 28,590 679 37,260
Kroger Co + 31,684 963 25,279 1,744 45,780
Lilly (Eli) & Co 201,737 2,313 154,971 4,451 298,217
Limited Inc 64,225 2,910 50,925 5,480 95,900
Lincoln National Corp 46,795 833 33,632 1,199 48,410
Liz Claiborne Inc 15,819 686 11,062 995 16,044
Lockheed Corp 62,566 589 45,721 863 66,990
</TABLE>
32 33
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MASTER INVESTMENT PORTFOLIO--LIFEPATH MASTER SERIES
FEBRUARY 28, 1995
Portfolios of Investments
<TABLE>
<CAPTION>
LIFEPATH 2000 LIFEPATH 2010 LIFEPATH 2020
---------------------------- ---------------------------- -------------
SECURITY NAME SHARES VALUE SHARES VALUE SHARES
<S> <C> <C> <C> <C> <C>
COMMON STOCKS (CONTINUED)
Longs Drug Stores Corp 37 $ 1,175 80 $ 2,540 240
Loral Corp 221 9,033 421 17,208 1,021
Lotus Development Corp + 30 1,253 241 10,062 520
Louisiana Land & Exploration Co 83 2,874 173 5,990 386
Louisiana-Pacific Corp 268 7,571 535 15,114 1,386
Lowe's Co Inc 100 3,363 678 22,798 1,620
Luby's Cafeterias Inc 45 1,024 113 2,571 270
M/A-Com Inc + 45 309 112 770 214
Mallinckrodt Group Inc 184 6,026 362 11,856 925
Manor Care Inc 59 1,748 291 8,621 681
Marriott International 123 3,813 485 15,035 1,292
Marsh & McLennan Companies Inc 80 6,560 282 23,124 796
Martin Marietta Inc 242 11,556 488 23,302 1,136
Masco Corp 399 10,025 777 19,522 2,014
Mattel Inc 147 3,289 873 19,533 2,273
Maxus Energy Corp + 285 1,104 570 2,209 1,417
May Co Department Stores Co 635 23,178 1,186 43,289 2,741
Maytag Corp 262 4,323 480 7,920 1,272
MBNA Corp 85 2,242 641 16,906 1,512
McDermott International Inc 144 4,032 252 7,056 680
McDonald's Corp 590 19,618 2,828 94,031 7,246
McDonnell Douglas Corp 282 15,792 521 29,176 1,481
McGraw-Hill Inc 36 2,538 247 17,414 559
MCI Communications 515 10,364 2,740 55,143 7,044
Mead Corp 154 8,432 286 15,659 740
Medtronic Inc 100 6,000 466 27,960 1,174
Mellon Bank Corp 363 13,839 708 26,993 1,791
Melville Corp 260 8,450 528 17,160 1,268
Mercantile Stores Co Inc 90 3,746 154 6,410 417
Merck & Co Inc 972 41,189 5,122 217,045 12,997
Meredith Corp 25 1,216 46 2,237 174
Merrill Lynch & Co Inc 408 16,728 921 37,761 2,370
Micron Technology Inc 88 5,456 406 25,172 1,034
Microsoft Corp + 459 28,917 2,412 151,956 6,066
Millipore Corp 75 3,984 141 7,491 282
Minnesota Mining & Manufacturing Co 367 20,093 1,666 91,214 4,362
Mobil Corp 998 86,826 1,929 167,823 4,812
Monsanto Co 283 22,428 572 45,331 1,316
Moore Corp Ltd 250 4,625 495 9,158 1,204
Morgan (J P) & Co Inc 489 31,541 956 61,662 2,333
Morrison Knudsen Corp 55 426 221 1,713 353
Morton International Inc 82 2,399 638 18,662 1,549
Motorola Inc 451 25,933 2,435 140,013 6,027
NACCO Industries Inc Class A 16 822 38 1,952 150
<CAPTION>
LIFEPATH 2020 LIFEPATH 2030 LIFEPATH 2040
------------- --------------------------- ----------------------------
SECURITY NAME VALUE SHARES VALUE SHARES VALUE
<S> <C> <C> <C> <C> <C>
Longs Drug Stores Corp $ 7,620 178 $ 5,652 266 $ 8,446
Loral Corp 41,733 812 33,191 1,045 42,714
Lotus Development Corp + 21,710 427 17,827 759 31,688
Louisiana Land & Exploration Co 13,365 262 9,072 399 13,815
Louisiana-Pacific Corp 39,155 1,024 28,928 1,457 41,160
Lowe's Co Inc 54,473 1,297 43,612 2,387 80,263
Luby's Cafeterias Inc 6,143 162 3,686 408 9,282
M/A-Com Inc + 1,471 254 1,746 328 2,255
Mallinckrodt Group Inc 30,294 672 22,008 958 31,375
Manor Care Inc 20,175 489 14,487 985 29,181
Marriott International 40,052 1,007 31,217 1,932 59,892
Marsh & McLennan Companies Inc 65,272 637 52,234 1,107 90,774
Martin Marietta Inc 54,244 835 39,871 1,187 56,679
Masco Corp 50,602 1,446 36,331 2,034 51,104
Mattel Inc 50,858 1,786 39,962 3,365 75,292
Maxus Energy Corp + 5,491 1,065 4,127 2,058 7,975
May Co Department Stores Co 100,047 2,245 81,943 3,513 128,225
Maytag Corp 20,988 1,003 16,550 1,418 23,397
MBNA Corp 39,879 1,194 31,492 2,228 58,764
McDermott International Inc 19,040 523 14,644 666 18,648
McDonald's Corp 240,930 5,599 186,167 10,597 352,350
McDonnell Douglas Corp 82,936 1,088 60,928 1,479 82,824
McGraw-Hill Inc 39,410 389 27,425 796 56,118
MCI Communications 141,761 5,490 110,486 10,279 206,865
Mead Corp 40,515 552 30,222 732 40,077
Medtronic Inc 70,440 884 53,040 1,746 104,760
Mellon Bank Corp 68,282 1,307 49,829 1,896 72,285
Melville Corp 41,210 999 32,468 1,326 43,095
Mercantile Stores Co Inc 17,358 366 15,235 480 19,980
Merck & Co Inc 550,748 10,059 426,250 19,145 811,269
Meredith Corp 8,461 118 5,738 178 8,655
Merrill Lynch & Co Inc 97,170 1,777 72,857 2,508 102,828
Micron Technology Inc 64,108 829 51,398 1,565 97,030
Microsoft Corp + 382,158 4,642 292,446 8,810 555,030
Millipore Corp 14,981 179 9,509 398 21,144
Minnesota Mining & Manufacturing Co 238,820 3,395 185,876 6,355 347,936
Mobil Corp 418,644 3,670 319,290 5,176 450,312
Monsanto Co 104,293 1,075 85,194 1,595 126,404
Moore Corp Ltd 22,274 906 16,761 1,311 24,254
Morgan (J P) & Co Inc 150,479 1,762 113,649 2,508 161,766
Morrison Knudsen Corp 2,736 333 2,581 447 3,464
Morton International Inc 45,308 1,188 34,749 2,224 65,052
Motorola Inc 346,553 4,672 268,640 8,951 514,683
NACCO Industries Inc Class A 7,706 49 2,517 161 8,271
</TABLE>
34 35
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FEBRUARY 28, 1995
Portfolios of Investments
<TABLE>
<CAPTION>
LIFEPATH 2000 LIFEPATH 2010 LIFEPATH 2020
---------------------------- ---------------------------- -------------
SECURITY NAME SHARES VALUE SHARES VALUE SHARES
<S> <C> <C> <C> <C> <C>
COMMON STOCKS (CONTINUED)
Nalco Chemical Co 71 $ 2,441 225 $ 7,734 652
National City Corp 373 10,351 704 19,536 1,850
National Medical Enterprises 416 6,448 766 11,873 1,991
National Semiconductor + 310 5,231 574 9,686 1,538
National Service Industries Inc 137 3,682 247 6,638 564
NationsBank 672 33,516 1,342 66,932 3,312
Navistar International Corp + 181 2,625 359 5,206 902
NBD Bancorp Inc 406 12,637 783 24,371 1,882
New York Times Co Class A 262 5,633 505 10,858 1,254
Newell Co 102 2,435 680 16,235 1,626
Newmont Mining Corp 24 867 299 10,801 860
Niagara Mohawk Power Corp 375 5,578 657 9,773 1,791
NICOR Inc 142 3,515 252 6,237 597
Nike Inc Class B 180 12,938 383 27,528 842
NorAm Energy Corp 264 1,485 628 3,533 1,332
Nordstrom Inc 19 803 319 13,478 894
Norfolk Southern Corp 342 22,615 676 44,701 1,685
Northern States Power Co 167 7,557 322 14,571 823
Northern Telecom Ltd 240 8,190 1,040 35,490 2,605
Northrop Grumman Corp 136 6,035 246 10,916 648
Norwest Corp 808 20,806 1,463 37,672 3,520
Novell Inc + 320 6,505 1,510 30,695 3,764
Nucor Corp 27 1,515 402 22,562 862
NYNEX Corp 1,052 41,291 2,053 80,580 5,135
Occidental Petroleum Corp 786 15,622 1,495 29,713 3,835
Ogden Corp 101 2,159 213 4,553 564
Ohio Edison Co 393 8,253 747 15,687 1,878
ONEOK Inc 47 811 114 1,967 295
Oracle Systems Corp + 462 14,495 1,857 58,248 4,634
Oryx Energy Co 245 2,695 441 4,851 1,139
Oshkosh B'Gosh Inc Class A 26 371 46 656 122
Outboard Marine Corp 35 735 79 1,659 216
Owens Corning Fiberglass + 26 874 213 7,162 493
PACCAR Inc 93 4,092 206 9,064 526
Pacific Enterprises 198 4,851 372 9,114 972
Pacific Gas & Electric Co 1,073 27,496 2,096 53,710 5,330
Pacific Telesis Group 1,064 31,920 2,063 61,890 5,159
PacifiCorp 694 13,273 1,360 26,010 3,530
Pall Corp 78 1,570 468 9,419 1,172
Panhandle Eastern Corp 324 7,290 742 16,695 1,830
Parker Hannifin Corp 135 6,311 246 11,501 622
PECO Energy Co 563 15,060 1,072 28,676 2,750
Penney (J C) Co Inc 588 25,211 1,118 47,934 2,800
Pennzoil Co 130 6,159 242 11,465 618
<CAPTION>
LIFEPATH 2020 LIFEPATH 2030 LIFEPATH 2040
------------- --------------------------- ----------------------------
SECURITY NAME VALUE SHARES VALUE SHARES VALUE
<S> <C> <C> <C> <C> <C>
Nalco Chemical Co $ 22,413 515 $ 17,703 1,051 $ 36,128
National City Corp 51,338 1,416 39,294 1,964 54,501
National Medical Enterprises 30,861 1,554 24,087 2,124 32,922
National Semiconductor + 25,954 1,083 18,276 1,624 27,405
National Service Industries Inc 15,158 459 12,336 593 15,937
NationsBank 165,186 2,555 127,431 3,541 176,607
Navistar International Corp + 13,079 633 9,179 917 13,297
NBD Bancorp Inc 58,577 1,417 44,104 2,083 64,833
New York Times Co Class A 26,961 884 19,006 1,387 29,821
Newell Co 38,821 1,295 30,918 2,375 56,703
Newmont Mining Corp 31,068 722 26,082 1,269 45,843
Niagara Mohawk Power Corp 26,641 1,324 19,695 1,837 27,325
NICOR Inc 14,776 481 11,905 669 16,558
Nike Inc Class B 60,519 653 46,934 1,009 72,522
NorAm Energy Corp 7,493 1,193 6,711 1,623 9,129
Nordstrom Inc 37,772 639 26,998 1,243 52,517
Norfolk Southern Corp 111,421 1,231 81,400 1,712 113,206
Northern States Power Co 37,241 609 27,557 838 37,920
Northern Telecom Ltd 88,896 1,980 67,568 3,834 130,835
Northrop Grumman Corp 28,755 454 20,146 636 28,223
Norwest Corp 90,640 2,817 72,538 4,375 112,656
Novell Inc + 76,515 2,983 60,639 5,597 113,776
Nucor Corp 48,380 731 41,027 1,281 71,896
NYNEX Corp 201,549 3,837 150,602 5,439 213,481
Occidental Petroleum Corp 76,221 2,838 56,405 4,020 79,898
Ogden Corp 12,056 491 10,495 522 11,158
Ohio Edison Co 39,438 1,433 30,093 2,003 42,063
ONEOK Inc 5,089 197 3,398 307 5,296
Oracle Systems Corp + 145,392 3,554 111,507 6,452 202,416
Oryx Energy Co 12,529 949 10,439 1,294 14,234
Oshkosh B'Gosh Inc Class A 1,739 81 1,154 216 3,078
Outboard Marine Corp 4,536 218 4,578 239 5,019
Owens Corning Fiberglass + 16,577 319 10,726 652 21,924
PACCAR Inc 23,144 395 17,380 494 21,736
Pacific Enterprises 23,814 699 17,126 1,036 25,382
Pacific Gas & Electric Co 136,581 3,956 101,373 5,581 143,013
Pacific Telesis Group 154,770 3,905 117,150 5,492 164,760
PacifiCorp 67,511 2,598 49,687 3,628 69,386
Pall Corp 23,587 943 18,978 1,721 34,635
Panhandle Eastern Corp 41,175 1,381 31,073 1,693 38,093
Parker Hannifin Corp 29,079 453 21,178 634 29,640
PECO Energy Co 73,563 2,043 54,650 2,877 76,960
Penney (J C) Co Inc 120,050 2,076 89,009 3,035 130,126
Pennzoil Co 29,278 371 17,576 563 26,672
</TABLE>
36 37
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FEBRUARY 28, 1995
Portfolios of Investments
<TABLE>
<CAPTION>
LIFEPATH 2000 LIFEPATH 2010 LIFEPATH 2020
---------------------------- ---------------------------- -------------
SECURITY NAME SHARES VALUE SHARES VALUE SHARES
<S> <C> <C> <C> <C> <C>
COMMON STOCKS (CONTINUED)
Peoples Energy Corp 61 $ 1,601 176 $ 4,620 469
Pep Boys-Manny Moe & Jack 57 1,867 289 9,465 653
Pepsico Inc 599 23,436 3,236 126,609 8,146
Perkin-Elmer Corp 27 773 214 6,126 469
Pfizer Inc 235 19,446 1,296 107,244 3,285
Phelps Dodge Corp 174 9,483 328 17,876 884
Philip Morris Co Inc 676 41,067 3,548 215,541 8,903
Phillips Petroleum Co 158 5,273 1,080 36,045 2,688
Pioneer Hi Bred International Inc 32 1,080 355 11,981 901
Pitney Bowes Inc 102 3,621 680 24,140 1,617
Pittston Services Group 123 3,075 210 5,250 540
Placer Dome Inc 192 3,912 946 19,275 2,453
PNC Bank Corp 586 14,943 1,116 28,458 2,872
Polaroid Corp 132 3,960 243 7,290 594
Potlatch Corp 76 3,278 117 5,046 334
PPG Industries Inc 148 5,439 834 30,650 2,145
Praxair Inc 161 3,643 546 12,353 1,367
Premark International Inc 61 2,638 292 12,629 608
Price/Costco Inc + 556 7,576 866 11,799 2,388
Procter & Gamble Co 523 34,780 2,794 185,801 7,047
Promus Co Inc + 54 1,931 399 14,264 1,008
Providian Corp 251 8,879 496 17,546 1,177
Public Services Enterprise Group 629 18,320 1,206 35,125 3,004
Pulte Corp 48 1,104 115 2,645 387
Quaker Oats Co 136 4,437 544 17,748 1,336
Ralston-Purina Group 51 2,435 396 18,909 1,005
Raychem Corp 125 5,047 212 8,560 492
Raytheon Co 362 25,521 671 47,306 1,570
Reebok International Ltd 95 3,479 320 11,720 798
Reynolds Metals Co 156 7,800 288 14,400 776
Rite Aid Corp 204 5,049 428 10,593 1,036
Roadway Services Inc 93 5,045 207 11,230 424
Rockwell International Corp 561 21,599 1,071 41,234 2,720
Rohm & Haas Co 169 9,485 323 18,128 745
Rollins Environmental Services 131 671 338 1,732 543
Rowan Co Inc + 172 1,075 472 2,950 1,022
Rubbermaid Inc 106 3,352 683 21,600 1,707
Russell Corp 73 2,208 210 6,353 539
Ryan's Family Steak House + 119 922 303 2,348 690
Ryder System Inc 186 4,325 362 8,417 956
SAFECO Corp 160 8,800 291 16,005 782
Safety-Kleen Corp 126 2,079 284 4,686 718
Salomon Inc 269 9,684 511 18,396 1,263
Santa Fe Energy Resources Inc 183 1,647 406 3,654 1,117
<CAPTION>
LIFEPATH 2020 LIFEPATH 2030 LIFEPATH 2040
------------- --------------------------- ----------------------------
SECURITY NAME VALUE SHARES VALUE SHARES VALUE
<S> <C> <C> <C> <C> <C>
Peoples Energy Corp $ 12,311 366 $ 9,608 420 $ 11,025
Pep Boys-Manny Moe & Jack 21,386 481 15,753 949 31,080
Pepsico Inc 318,712 6,350 248,444 12,021 470,322
Perkin-Elmer Corp 13,425 322 9,217 655 18,749
Pfizer Inc 271,834 2,503 207,123 4,822 399,021
Phelps Dodge Corp 48,178 617 33,627 884 48,178
Philip Morris Co Inc 540,857 6,869 417,292 13,010 790,358
Phillips Petroleum Co 89,712 2,075 69,253 3,958 132,098
Pioneer Hi Bred International Inc 30,409 692 23,355 1,296 43,740
Pitney Bowes Inc 57,404 1,300 46,150 2,348 83,354
Pittston Services Group 13,500 330 8,250 485 12,125
Placer Dome Inc 49,980 1,980 40,343 3,643 74,226
PNC Bank Corp 73,236 2,172 55,386 3,018 76,959
Polaroid Corp 17,820 429 12,870 576 17,280
Potlatch Corp 14,404 222 9,574 355 15,309
PPG Industries Inc 78,829 1,684 61,887 3,241 119,107
Praxair Inc 30,928 1,110 25,114 2,057 46,540
Premark International Inc 26,296 478 20,674 1,017 43,985
Price/Costco Inc + 32,537 1,733 23,612 2,829 38,545
Procter & Gamble Co 468,626 5,436 361,494 10,428 693,462
Promus Co Inc + 36,036 861 30,781 1,558 55,699
Providian Corp 41,636 855 30,246 1,242 43,936
Public Services Enterprise Group 87,492 2,231 64,978 3,143 91,540
Pulte Corp 8,901 213 4,899 320 7,360
Quaker Oats Co 43,587 1,118 36,475 2,078 67,795
Ralston-Purina Group 47,989 762 36,386 1,540 73,535
Raychem Corp 19,865 409 16,513 549 22,166
Raytheon Co 110,685 1,214 85,587 1,710 120,555
Reebok International Ltd 29,227 696 25,491 1,223 44,792
Reynolds Metals Co 38,800 568 28,400 791 39,550
Rite Aid Corp 25,641 814 20,147 1,059 26,210
Roadway Services Inc 23,002 375 20,344 600 32,550
Rockwell International Corp 104,720 1,966 75,691 2,853 109,841
Rohm & Haas Co 41,813 612 34,349 939 52,701
Rollins Environmental Services 2,783 604 3,096 793 4,064
Rowan Co Inc + 6,388 819 5,119 1,057 6,606
Rubbermaid Inc 53,984 1,341 42,409 2,433 76,944
Russell Corp 16,305 404 12,221 484 14,641
Ryan's Family Steak House + 5,348 463 3,588 715 5,541
Ryder System Inc 22,227 673 15,647 1,037 24,110
SAFECO Corp 43,010 570 31,350 762 41,910
Safety-Kleen Corp 11,847 493 8,135 699 11,534
Salomon Inc 45,468 1,001 36,036 1,410 50,760
Santa Fe Energy Resources Inc 10,053 848 7,632 1,149 10,341
</TABLE>
38 39
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MASTER INVESTMENT PORTFOLIO--LIFEPATH MASTER SERIES
FEBRUARY 28, 1995
Portfolios of Investments
<TABLE>
<CAPTION>
LIFEPATH 2000 LIFEPATH 2010 LIFEPATH 2020
---------------------------- ---------------------------- -------------
SECURITY NAME SHARES VALUE SHARES VALUE SHARES
<S> <C> <C> <C> <C> <C>
COMMON STOCKS (CONTINUED)
Santa Fe Pacific Corp 207 $ 4,399 179 $ 3,804 685
Santa Fe Pacific Gold Corp + 128 1,392 527 5,731 1,338
Sara Lee Corp 413 10,841 1,945 51,056 4,999
SCE Corp 1,110 18,176 2,076 33,995 5,518
Schering-Plough Corp 188 14,735 756 59,252 2,007
Schlumberger Ltd 227 12,911 955 54,316 2,477
Scientific-Atlanta Inc 82 1,917 260 6,078 738
Scott Paper Co 80 6,340 283 22,428 820
Seagram Co Ltd 928 28,536 1,817 55,873 4,500
Sears Roebuck & Co 891 43,882 1,685 82,986 4,284
Service Corp International 224 6,300 398 11,194 1,133
Shared Medical System Corp 40 1,378 133 4,580 253
Shawmut National Corp 281 7,201 571 14,632 1,467
Sherwin Williams Co 227 7,633 426 14,324 1,031
Shoney's Inc + 97 1,067 160 1,760 434
Sigma Aldrich Corp 62 2,263 151 5,512 547
Silicon Graphics Inc + 117 4,051 590 20,429 1,420
Skyline Corp 20 365 41 748 117
Snap-On Inc 124 4,216 212 7,208 492
Sonat Inc 228 6,612 402 11,658 1,038
Southern Co 1,636 33,743 3,167 65,319 7,879
Southwest Airlines Co 75 1,322 607 10,698 1,515
Southwestern Bell Corp 502 20,896 2,422 100,816 6,225
Springs Industries Inc Class A 31 1,221 76 2,993 205
Sprint Corp 877 25,652 1,674 48,965 3,830
SPX Corp 22 336 43 656 121
St Jude Medical Inc 32 1,160 142 5,148 499
St Paul Co Inc 223 10,843 423 20,568 1,008
Stanley Works 129 5,208 215 8,681 516
Stone Container Corp + 33 771 406 9,490 898
Stride Rite Corp 113 1,455 198 2,549 535
Sun Co Inc 262 7,631 530 15,436 1,280
Sun Microsystems Inc + 239 7,648 461 14,752 1,133
SunTrust Banks Inc 290 15,624 578 31,140 1,452
Super Value Inc 176 4,532 330 8,498 882
Sysco Corp 148 4,200 768 21,792 1,903
Tandem Computers Inc + 275 4,675 566 9,622 1,373
Tandy Corp 161 7,205 292 13,067 708
Tektronix Inc 78 2,672 169 5,788 311
Tele-Communication Inc Class A + 462 10,511 2,490 56,648 6,351
Teledyne Inc + 122 2,821 281 6,498 709
Temple-Inland Inc 147 7,185 281 13,734 729
Tenneco Inc 421 19,156 821 37,356 2,102
Texaco Inc 654 41,693 1,276 81,345 3,174
<CAPTION>
LIFEPATH 2020 LIFEPATH 2030 LIFEPATH 2040
------------- --------------------------- ----------------------------
SECURITY NAME VALUE SHARES VALUE SHARES VALUE
<S> <C> <C> <C> <C> <C>
Santa Fe Pacific Corp $ 14,556 543 $ 11,539 1,156 $ 24,565
Santa Fe Pacific Gold Corp + 14,551 1,052 11,441 1,959 21,304
Sara Lee Corp 131,224 3,899 102,349 7,358 193,148
SCE Corp 90,357 4,061 66,499 5,799 94,959
Schering-Plough Corp 157,299 1,562 122,422 2,905 227,679
Schlumberger Ltd 140,879 1,929 109,712 3,732 212,258
Scientific-Atlanta Inc 17,251 634 14,820 1,114 26,040
Scott Paper Co 64,985 562 44,539 1,113 88,205
Seagram Co Ltd 138,375 3,395 104,396 4,848 149,076
Sears Roebuck & Co 210,987 3,167 155,975 4,481 220,689
Service Corp International 31,866 826 23,231 1,091 30,684
Shared Medical System Corp 8,713 152 5,235 382 13,155
Shawmut National Corp 37,592 1,070 27,419 1,536 39,360
Sherwin Williams Co 34,667 760 25,555 1,080 36,315
Shoney's Inc + 4,774 284 3,124 583 6,413
Sigma Aldrich Corp 19,966 382 13,943 745 27,193
Silicon Graphics Inc + 49,168 1,145 39,646 2,160 74,790
Skyline Corp 2,135 74 1,351 128 2,336
Snap-On Inc 16,728 409 13,906 549 18,666
Sonat Inc 30,102 836 24,244 1,081 31,349
Southern Co 162,504 5,970 123,131 8,405 173,353
Southwest Airlines Co 26,702 1,233 21,732 2,190 38,599
Southwestern Bell Corp 259,116 4,838 201,382 9,125 379,828
Springs Industries Inc Class A 8,072 115 4,528 247 9,726
Sprint Corp 112,028 3,183 93,103 4,903 143,413
SPX Corp 1,845 79 1,205 142 2,166
St Jude Medical Inc 18,089 327 11,854 675 24,469
St Paul Co Inc 49,014 721 35,059 1,057 51,397
Stanley Works 20,834 423 17,079 559 22,570
Stone Container Corp + 20,991 743 17,368 1,399 32,702
Stride Rite Corp 6,888 417 5,369 599 7,712
Sun Co Inc 37,280 987 28,746 1,342 39,086
Sun Microsystems Inc + 36,256 831 26,592 1,195 38,240
SunTrust Banks Inc 78,227 1,043 56,192 1,618 87,170
Super Value Inc 22,712 622 16,017 874 22,506
Sysco Corp 53,998 1,502 42,619 2,772 78,656
Tandem Computers Inc + 23,341 1,039 17,663 1,493 25,381
Tandy Corp 31,683 588 26,313 815 36,471
Tektronix Inc 10,652 225 7,706 460 15,755
Tele-Communication Inc Class A + 144,485 4,856 110,474 9,342 212,531
Teledyne Inc + 16,396 489 11,308 680 15,725
Temple-Inland Inc 35,630 533 26,050 709 34,652
Tenneco Inc 95,641 1,672 76,076 2,149 97,780
Texaco Inc 202,343 2,365 150,769 3,341 212,989
</TABLE>
40 41
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FEBRUARY 28, 1995
Portfolios of Investments
<TABLE>
<CAPTION>
LIFEPATH 2000 LIFEPATH 2010 LIFEPATH 2020
---------------------------- ---------------------------- -------------
SECURITY NAME SHARES VALUE SHARES VALUE SHARES
<S> <C> <C> <C> <C> <C>
COMMON STOCKS (CONTINUED)
Texas Instruments Inc 36 $ 2,835 358 $ 28,193 999
Texas Utilities Co 570 18,739 1,103 36,261 2,795
Textron Inc 230 12,593 453 24,802 1,069
Thomas & Betts Corp 33 2,199 77 5,130 237
Time Warner Inc 263 10,158 1,550 59,869 3,898
Times Mirror Co Class A 348 6,438 610 11,285 1,618
Timken Co 79 2,834 170 6,099 362
TJX Companies Inc 178 2,403 332 4,482 774
Torchmark Corp 178 7,454 331 13,861 790
Toys R Us Inc + 209 5,826 1,197 33,366 2,982
Transamerica Corp 174 9,505 328 17,917 885
Travelers Inc 817 31,761 1,495 58,118 3,893
Tribune Co 68 3,800 223 12,460 668
Trinova Corp 50 1,350 116 3,132 333
TRW Inc 163 10,717 319 20,974 814
Tyco International Inc 83 4,326 258 13,448 734
U.S. Bancorp 250 6,281 495 12,437 1,208
U.S. Healthcare Inc 108 4,644 685 29,455 1,659
U.S. Life Corp 40 1,525 133 5,071 248
U.S. West Inc 1,144 44,330 2,183 84,591 5,516
Unicom Corp 549 14,000 1,036 26,418 2,632
Union Camp Corp 172 8,858 326 16,789 858
Union Carbide Corp 390 11,164 744 21,297 1,867
Union Electric Co 254 9,620 498 18,862 1,308
Union Pacific Corp 509 26,595 998 52,146 2,447
Unisys Corp + 423 3,754 773 6,860 1,861
United Healthcare Corp 139 5,977 715 30,745 1,788
United States Surgical 149 3,129 282 5,922 740
United Technologies Corp 323 21,439 609 40,422 1,517
Unocal Corp 623 17,678 1,151 32,660 2,964
UNUM Corp 183 7,778 360 15,300 924
Upjohn Co 428 15,087 826 29,117 2,119
USAir Group Inc + 129 758 336 1,974 525
USF & G Corp 224 3,192 399 5,686 1,094
UST Inc 134 3,987 798 23,741 2,052
USX - Marathon Group 702 11,408 1,391 22,604 3,570
USX - US Steel Group 182 6,052 360 11,970 947
Varity Corp + 127 4,636 214 7,811 494
VF Corp 163 8,395 294 15,141 809
Viacom Inc Class B + 272 12,172 1,472 65,872 3,721
Wachovia Corp 425 14,769 824 28,634 2,091
Wal Mart Stores Inc 1,802 42,798 9,365 222,419 23,749
Walgreen Co 90 4,253 479 22,633 1,253
Warner Lambert Co 59 4,506 569 43,457 1,393
<CAPTION>
LIFEPATH 2020 LIFEPATH 2030 LIFEPATH 2040
------------- --------------------------- ----------------------------
SECURITY NAME VALUE SHARES VALUE SHARES VALUE
<S> <C> <C> <C> <C> <C>
Texas Instruments Inc $ 78,671 701 $ 55,204 1,459 $ 114,896
Texas Utilities Co 91,886 2,014 66,210 2,909 95,633
Textron Inc 58,528 784 42,924 1,186 64,934
Thomas & Betts Corp 15,790 169 11,260 251 16,723
Time Warner Inc 150,560 3,048 117,729 5,718 220,858
Times Mirror Co Class A 29,933 1,183 21,886 1,706 31,561
Timken Co 12,987 326 11,695 366 13,130
TJX Companies Inc 10,449 650 8,775 1,006 13,581
Torchmark Corp 33,081 630 26,381 1,028 43,048
Toys R Us Inc + 83,123 2,287 63,750 4,304 119,974
Transamerica Corp 48,343 619 33,813 861 47,032
Travelers Inc 151,340 2,959 115,031 4,163 161,837
Tribune Co 37,325 510 28,496 1,038 57,998
Trinova Corp 8,991 221 5,967 475 12,825
TRW Inc 53,521 599 39,384 818 53,784
Tyco International Inc 38,260 578 30,128 1,153 60,100
U.S. Bancorp 30,351 860 21,608 1,237 31,080
U.S. Healthcare Inc 71,337 1,319 56,717 2,397 103,071
U.S. Life Corp 9,455 157 5,986 279 10,637
U.S. West Inc 213,745 4,107 159,146 5,884 228,005
Unicom Corp 67,116 1,994 50,847 2,754 70,227
Union Camp Corp 44,187 621 31,982 862 44,393
Union Carbide Corp 53,443 1,326 37,957 1,993 57,050
Union Electric Co 49,541 966 36,587 1,358 51,434
Union Pacific Corp 127,856 1,830 95,618 2,673 139,664
Unisys Corp + 16,516 1,626 14,431 2,406 21,353
United Healthcare Corp 76,884 1,375 59,125 2,641 113,563
United States Surgical 15,540 540 11,340 693 14,553
United Technologies Corp 100,691 1,156 76,730 1,675 111,178
Unocal Corp 84,104 2,223 63,078 3,146 89,268
UNUM Corp 39,270 666 28,305 955 40,588
Upjohn Co 74,695 1,607 56,647 2,276 80,229
USAir Group Inc + 3,084 601 3,531 759 4,459
USF & G Corp 15,590 827 11,785 1,067 15,205
UST Inc 61,047 1,630 48,493 3,041 90,470
USX - Marathon Group 58,013 2,643 42,949 3,685 59,881
USX - US Steel Group 31,488 663 22,045 949 31,554
Varity Corp + 18,031 422 15,403 552 20,148
VF Corp 41,664 594 30,591 819 42,179
Viacom Inc Class B + 166,515 2,900 129,775 5,474 244,962
Wachovia Corp 72,662 1,577 54,801 2,162 75,130
Wal Mart Stores Inc 564,039 18,393 436,834 34,913 829,184
Walgreen Co 59,204 945 44,651 1,823 86,137
Warner Lambert Co 106,390 1,111 84,853 2,051 156,645
</TABLE>
42 43
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FEBRUARY 28, 1995
Portfolios of Investments
<TABLE>
<CAPTION>
LIFEPATH 2000 LIFEPATH 2010 LIFEPATH 2020
---------------------------- ---------------------------- -------------
SECURITY NAME SHARES VALUE SHARES VALUE SHARES
<S> <C> <C> <C> <C> <C>
COMMON STOCKS (CONTINUED)
Wells Fargo & Co 122 $ 19,596 255 $ 40,959 586
Wendy's International Inc 255 3,953 450 6,975 1,109
Western Atlas Inc + 132 5,445 243 10,024 667
Westinghouse Electric Corp 294 4,557 1,439 22,305 3,639
Westvaco Corp 168 6,636 322 12,719 848
Weyerhaeuser Co 510 20,783 974 39,691 2,547
Whirlpool Corp 180 9,788 383 20,826 942
Whitman Corp 60 1,133 378 7,135 1,126
Williams Co Inc 257 7,389 401 11,529 1,139
Winn-Dixie Stores Inc 80 4,480 283 15,848 742
WMX Technologies Inc 422 11,130 1,953 51,510 5,014
Woolworth Corp 331 5,048 617 9,409 1,638
Worthington Industries Inc 33 664 357 7,185 903
Wrigley (Wm) Jr Co 79 3,565 469 21,164 1,207
Xerox Corp 257 28,410 526 58,226 1,271
Yellow Corp 49 1,035 116 2,451 373
Zenith Electronic Corp + 95 772 183 1,487 486
Zurn Industries Inc 22 396 43 774 119
------------- -------------
LARGE CAPITALIZATION STOCKS - VALUE $ 5,615,103 $ 15,432,182
- COST $ 5,466,362 $ 14,784,994
MEDIUM CAPITALIZATION STOCKS
Percent of Net Assets 7.6% 8.5%
3Com Corp + -- $ -- 500 $ 26,063 --
Adaptec Inc + -- -- -- -- --
ADC Telecommunication + 293 16,335 240 13,380 424
Adobe Systems Inc 619 22,129 510 18,233 906
AES Corp 784 14,504 640 11,840 1,148
AFLAC Inc 1,131 42,695 880 33,220 1,578
Airgas Inc + -- -- -- -- --
Albemarle Corp 713 10,160 560 7,980 1,012
Alexander & Baldwin Inc 504 10,962 390 8,483 714
Allegheny Ludlum Corp 772 16,309 610 12,886 1,086
Allegheny Power System Inc 1,284 30,174 1,010 23,735 1,809
Allmerica Property & Casualty Co Inc -- -- -- -- --
Allstate Corp -- -- 700 19,250 --
Altera Corp + 230 13,081 180 10,238 309
Alumax Inc + 489 13,998 380 10,878 673
AMBAC Inc -- -- -- -- --
American Medical Holdings Inc -- -- 500 12,750 --
American National Insurance Co -- -- -- -- --
American Power Conversion + 1,000 17,938 780 13,991 1,394
American Premier Underwriter 504 12,411 390 9,604 713
<CAPTION>
LIFEPATH 2020 LIFEPATH 2030 LIFEPATH 2040
------------- --------------------------- ----------------------------
SECURITY NAME VALUE SHARES VALUE SHARES VALUE
<S> <C> <C> <C> <C> <C>
Wells Fargo & Co $ 94,126 514 $ 82,561 652 $ 104,728
Wendy's International Inc 17,190 913 14,152 1,461 22,646
Western Atlas Inc + 27,514 507 20,914 672 27,720
Westinghouse Electric Corp 56,405 2,853 44,222 5,442 84,351
Westvaco Corp 33,496 609 24,056 836 33,022
Weyerhaeuser Co 103,790 1,855 75,591 2,666 108,640
Whirlpool Corp 51,221 663 36,051 910 49,481
Whitman Corp 21,253 848 16,006 1,607 30,332
Williams Co Inc 32,746 793 22,799 1,318 37,893
Winn-Dixie Stores Inc 41,552 563 31,528 1,111 62,216
WMX Technologies Inc 132,246 3,923 103,469 7,347 193,684
Woolworth Corp 24,980 1,250 19,063 1,735 26,459
Worthington Industries Inc 18,173 749 15,074 1,402 28,215
Wrigley (Wm) Jr Co 54,466 895 40,387 1,777 80,187
Xerox Corp 140,831 995 110,237 1,422 157,664
Yellow Corp 7,880 290 6,126 324 6,845
Zenith Electronic Corp + 3,949 384 3,120 670 5,444
Zurn Industries Inc 2,142 76 1,368 135 2,430
------------ ----------- -----------
LARGE CAPITALIZATION STOCKS - VALUE $ 38,877,110 $ 29,681,327 $ 49,078,489
- COST $ 36,982,045 $ 28,123,022 $ 46,324,761
MEDIUM CAPITALIZATION STOCKS
Percent of Net Assets 8.6% 9.7% 9.3%
3Com Corp + $ -- -- $ -- 400 $ 20,850
Adaptec Inc + -- -- -- 500 16,500
ADC Telecommunication + 23,638 304 16,948 280 15,610
Adobe Systems Inc 32,390 651 23,273 615 21,986
AES Corp 21,238 798 14,763 750 13,875
AFLAC Inc 59,570 1,158 43,715 685 25,859
Airgas Inc + -- -- -- 300 7,763
Albemarle Corp 14,421 732 10,431 686 9,776
Alexander & Baldwin Inc 15,530 509 11,071 480 10,440
Allegheny Ludlum Corp 22,942 786 16,604 740 15,633
Allegheny Power System Inc 42,512 1,319 30,997 1,230 28,905
Allmerica Property & Casualty Co Inc -- -- -- 600 11,700
Allstate Corp -- -- -- 1,000 27,500
Altera Corp + 17,574 224 12,740 220 12,513
Alumax Inc + 19,265 493 14,112 470 13,454
AMBAC Inc -- -- -- 300 12,188
American Medical Holdings Inc -- -- -- 700 17,850
American National Insurance Co -- -- -- 100 5,000
American Power Conversion + 25,005 1,009 18,099 960 17,220
American Premier Underwriter 17,558 508 12,510 480 11,820
</TABLE>
44 45
<PAGE> 178
MASTER INVESTMENT PORTFOLIO--LIFEPATH MASTER SERIES
FEBRUARY 28, 1995
Portfolios of Investments
<TABLE>
<CAPTION>
LIFEPATH 2000 LIFEPATH 2010 LIFEPATH 2020
---------------------------- ---------------------------- -------------
SECURITY NAME SHARES VALUE SHARES VALUE SHARES
<S> <C> <C> <C> <C> <C>
COMMON STOCKS (CONTINUED)
American Re Corp + -- $ -- 400 $ 13,650 --
American Water Works Co Inc -- -- -- -- --
Amphenol Corp Class A + -- -- -- -- --
AmSouth Bancorp -- -- -- -- --
Anadarko Petroleum Corp 639 28,036 500 21,938 901
Analog Devices Inc + 801 20,125 630 15,829 1,153
AnnTaylor Stores Inc + 247 8,151 195 6,435 351
Aon Corp 1,090 37,878 860 29,885 1,560
Apache Corp 662 16,550 520 13,000 949
Applied Materials Inc + 900 41,513 720 33,210 1,291
Arco Chemical Co -- -- -- -- --
Argonaut Group Inc -- -- -- -- --
Arrow Electronics Inc + 493 20,460 396 16,434 699
Atlanta Gas & Light Co 269 9,079 220 7,425 399
Atlantic Energy Inc 569 10,811 460 8,740 830
Atmel Corp + 481 16,414 380 12,968 683
AutoZone Inc + -- -- 1,000 26,500 --
Avnet Inc 430 16,663 350 13,563 614
Bancorp Hawaii Inc 474 13,272 360 10,080 657
Bandag Inc -- -- -- -- --
Bandag Inc Class A -- -- -- -- --
Bank of New York Inc + 2,039 68,307 810 27,135 2,903
Bank South Corp -- -- -- -- --
Battle Mountain Gold Co 878 8,341 690 6,555 1,245
Bay Networks Inc + 1,162 36,458 920 28,865 1,650
BayBanks Inc -- -- -- -- --
BB & T Financial Corp -- -- -- -- --
Bear Stearns & Co Inc 1,296 24,300 980 18,375 1,770
Beckman Instruments Inc 294 8,967 250 7,625 450
Bed Bath & Beyond Inc + -- -- -- -- --
Belo (A H) Corp 228 12,854 170 9,584 307
Bergen Brunswig Corp Class A 20 546 16 436 29
Best Buy Co Inc + -- -- -- -- --
Betz Labs Inc 296 13,135 240 10,650 427
Biogen Inc + 359 14,809 280 11,550 491
BMC Software Inc + 278 17,862 220 14,135 383
Bob Evans Farms Inc 468 9,945 360 7,650 652
Bowater Inc 395 13,134 310 10,308 552
Brinker International Inc + 756 15,026 590 11,726 1,071
Brooklyn Union Gas Co 510 12,495 400 9,800 719
Burlington Industries Inc + 729 8,019 577 6,347 1,036
Cabletron Systems Inc + 750 29,719 610 24,171 1,090
Cabot Corp 405 13,770 320 10,880 586
Cadence Design System Inc + 437 11,198 350 8,969 645
<CAPTION>
LIFEPATH 2020 LIFEPATH 2030 LIFEPATH 2040
------------- --------------------------- ---------------------------
SECURITY NAME VALUE SHARES VALUE SHARES VALUE
<S> <C> <C> <C> <C> <C>
American Re Corp + $ -- -- $ -- 400 $ 13,650
American Water Works Co Inc -- -- -- 300 8,850
Amphenol Corp Class A + -- -- -- 300 7,388
AmSouth Bancorp -- -- -- 500 14,563
Anadarko Petroleum Corp 39,531 646 28,343 415 18,208
Analog Devices Inc + 28,969 831 20,879 765 19,221
AnnTaylor Stores Inc + 11,583 253 8,349 237 7,821
Aon Corp 54,210 1,125 39,094 650 22,588
Apache Corp 23,725 684 17,100 635 15,875
Applied Materials Inc + 59,547 916 42,251 565 26,061
Arco Chemical Co -- -- -- 100 4,250
Argonaut Group Inc -- -- -- 200 6,150
Arrow Electronics Inc + 29,009 510 21,165 475 19,713
Atlanta Gas & Light Co 13,466 279 9,416 260 8,775
Atlantic Energy Inc 15,770 590 11,210 550 10,450
Atmel Corp + 23,307 494 16,858 463 15,800
AutoZone Inc + -- -- -- 1,000 26,500
Avnet Inc 23,793 459 17,786 415 16,081
Bancorp Hawaii Inc 18,396 477 13,356 435 12,180
Bandag Inc -- -- -- 100 6,000
Bandag Inc Class A -- -- -- 100 5,338
Bank of New York Inc + 97,251 2,088 69,948 1,260 42,210
Bank South Corp -- -- -- 600 11,250
Battle Mountain Gold Co 11,828 895 8,503 845 8,028
Bay Networks Inc + 51,769 1,194 37,462 718 22,527
BayBanks Inc -- -- -- 200 12,550
BB & T Financial Corp -- -- -- 400 12,750
Bear Stearns & Co Inc 33,188 1,330 24,938 740 13,875
Beckman Instruments Inc 13,725 305 9,303 280 8,540
Bed Bath & Beyond Inc + -- -- -- 200 4,850
Belo (A H) Corp 17,307 222 12,515 220 12,403
Bergen Brunswig Corp Class A 796 21 564 19 525
Best Buy Co Inc + -- -- -- 300 6,488
Betz Labs Inc 18,948 307 13,623 305 13,534
Biogen Inc + 20,254 361 14,891 345 14,231
BMC Software Inc + 24,608 288 18,504 270 17,348
Bob Evans Farms Inc 13,855 472 10,030 450 9,563
Bowater Inc 18,354 407 13,533 375 12,469
Brinker International Inc + 21,286 771 15,324 730 14,509
Brooklyn Union Gas Co 17,616 514 12,593 490 12,005
Burlington Industries Inc + 11,396 749 8,239 702 7,722
Cabletron Systems Inc + 43,191 777 30,789 525 20,803
Cabot Corp 19,924 416 14,144 395 13,430
Cadence Design System Inc + 16,528 465 11,916 440 11,275
</TABLE>
46 47
<PAGE> 179
MASTER INVESTMENT PORTFOLIO--LIFEPATH MASTER SERIES
FEBRUARY 28, 1995
Portfolios of Investments
<TABLE>
<CAPTION>
LIFEPATH 2000 LIFEPATH 2010 LIFEPATH 2020
---------------------------- ---------------------------- -------------
SECURITY NAME SHARES VALUE SHARES VALUE SHARES
<S> <C> <C> <C> <C> <C>
COMMON STOCKS (CONTINUED)
Callaway Golf Co 298 $ 10,058 290 $ 9,788 529
Cardinal Health Inc 441 21,830 340 16,830 609
Caremark International Inc -- -- -- -- --
CBI Industries 406 9,846 320 7,760 589
Centocor Inc + 546 10,408 440 8,388 781
Central Fidelity Banks Inc 417 11,363 330 8,993 600
Century Telephone Enterprise 567 17,648 460 14,318 828
Chesapeake Corp 256 8,448 200 6,600 361
Chicago & North Western Holdings Corp + -- -- -- -- --
Chiron Corp + 224 13,608 173 10,510 306
Chris-Craft Industries Inc + 296 10,508 240 8,520 452
Cincinnati Financial Corp -- -- 400 22,500 --
Cintas Corp 510 19,380 400 15,200 720
Circus Circus Entertainment Inc + 929 24,386 730 19,163 1,322
Cirrus Logic Corp + 317 10,659 240 8,070 448
Clayton Homes Inc 817 14,604 650 11,619 1,145
Clear Channel Communications Inc + -- -- -- -- --
CMS Energy Corp 921 22,104 740 17,760 1,314
CNA Financial Corp + -- -- -- -- --
Coca-Cola Enterprises 1,412 28,946 1,110 22,755 1,988
Coltec Industries + -- -- -- -- --
Comdisco Inc 411 10,481 330 8,415 594
Comerica Inc 1,289 36,253 1,010 28,406 1,813
Commerce Bancshares Inc -- -- -- -- --
Compass Bankshares Inc -- -- -- -- --
Compuware Corp + -- -- 400 14,700 --
Comsat Corp 510 9,053 400 7,100 719
Conner Peripherals Inc + 545 5,382 430 4,246 780
Conseco Inc -- -- -- -- --
Consolidated Papers Inc 486 23,510 380 18,383 --
Consolidated Stores Corp + -- -- 670
Cordis Corp + 165 10,725 140 9,100 243
Countrywide Credit & Industries Inc -- -- -- -- --
Cox Communications Inc Class A + 190 3,254 333 5,703 884
Cracker Barrel Old Country Store Inc 649 14,724 510 11,571 911
Crestar Financial Corp 402 17,336 320 13,800 585
Crompton & Knowles Corp 550 9,281 440 7,425 785
CUC International Inc + 1,207 42,547 970 34,193 1,755
Cypress Semiconductor + 400 11,350 320 9,080 582
Danaher Corp 600 17,700 480 14,160 862
Dauphin Deposit Corp 360 9,090 270 6,818 492
Dean Foods Co 424 13,144 340 10,540 607
Dell Computer Corp + 405 16,808 330 13,695 587
<CAPTION>
LIFEPATH 2020 LIFEPATH 2030 LIFEPATH 2040
------------- --------------------------- ---------------------------
SECURITY NAME VALUE SHARES VALUE SHARES VALUE
<S> <C> <C> <C> <C> <C>
Callaway Golf Co $ 17,854 378 $ 12,758 358 $ 12,083
Cardinal Health Inc 30,146 454 22,473 419 20,741
Caremark International Inc -- -- -- 600 10,500
CBI Industries 14,283 419 10,161 395 9,579
Centocor Inc + 14,888 566 10,789 520 9,913
Central Fidelity Banks Inc 16,350 430 11,718 405 11,036
Century Telephone Enterprise 25,772 588 18,302 565 17,586
Chesapeake Corp 11,913 266 8,778 250 8,250
Chicago & North Western Holdings Corp + -- -- -- 400 10,000
Chiron Corp + 18,590 225 13,669 213 12,940
Chris-Craft Industries Inc + 16,046 307 10,899 305 10,828
Cincinnati Financial Corp -- -- -- 300 16,875
Cintas Corp 27,360 515 19,570 490 18,620
Circus Circus Entertainment Inc + 34,703 962 25,253 595 15,619
Cirrus Logic Corp + 15,064 333 11,197 305 10,256
Clayton Homes Inc 20,467 845 15,104 781 13,960
Clear Channel Communications Inc + -- -- -- 100 5,688
CMS Energy Corp 31,536 954 22,896 885 21,240
CNA Financial Corp + -- -- -- 100 7,388
Coca-Cola Enterprises 40,754 1,448 29,684 855 17,528
Coltec Industries + -- -- -- 500 8,563
Comdisco Inc 15,147 424 10,812 395 10,073
Comerica Inc 50,991 1,323 37,209 840 23,625
Commerce Bancshares Inc -- -- -- 300 9,225
Compass Bankshares Inc -- -- -- 300 8,250
Compuware Corp + -- -- -- 400 14,700
Comsat Corp 12,762 514 9,124 490 8,698
Conner Peripherals Inc + 7,703 565 5,579 520 5,135
Conseco Inc -- -- -- 200 7,125
Consolidated Papers Inc -- 490 23,704 270 13,061
Consolidated Stores Corp + 32,411 -- -- 500 9,500
Cordis Corp + 15,795 183 11,895 155 10,075
Countrywide Credit & Industries Inc -- -- -- 800 13,000
Cox Communications Inc Class A + 15,139 647 11,080 433 7,415
Cracker Barrel Old Country Store Inc 20,668 671 15,223 625 14,180
Crestar Financial Corp 25,228 415 17,897 385 16,603
Crompton & Knowles Corp 13,247 570 9,619 530 8,944
CUC International Inc + 61,864 1,250 44,063 780 27,495
Cypress Semiconductor + 16,514 412 11,691 385 10,924
Danaher Corp 25,429 622 18,349 580 17,110
Dauphin Deposit Corp 12,423 362 9,141 345 8,711
Dean Foods Co 18,817 437 13,547 405 12,555
Dell Computer Corp + 24,361 417 17,306 385 15,978
</TABLE>
48 49
<PAGE> 180
MASTER INVESTMENT PORTFOLIO--LIFEPATH MASTER SERIES
FEBRUARY 28, 1995
Portfolios of Investments
<TABLE>
<CAPTION>
LIFEPATH 2000 LIFEPATH 2010 LIFEPATH 2020
---------------------------- ---------------------------- -------------
SECURITY NAME SHARES VALUE SHARES VALUE SHARES
<S> <C> <C> <C> <C> <C>
COMMON STOCKS (CONTINUED)
Delmarva Power & Light Co 640 $ 12,720 510 $ 10,136 903
Dentsply International Inc -- -- -- -- --
Department 56 Inc + -- -- -- -- --
Diamond Shamrock R&M Inc 304 7,600 250 6,250 435
Diebold Inc 340 12,028 260 9,198 471
Dole Food Inc 646 16,796 510 13,260 908
Dollar General Corp 482 16,750 380 13,205 684
Dr Pepper / Seven-Up Co Inc + -- -- -- -- --
Duracell International Inc -- -- 500 20,813 --
Eckerd (Jack) Corp + -- -- -- -- --
Edison Brothers Stores Inc -- -- -- -- 347
Edwards (A G) & Sons Inc 655 14,738 520 11,700 917
El Paso Natural Gas Co 398 12,239 320 9,840 556
Electronic Arts Inc + -- -- -- -- --
EMC Corp + 2,058 35,243 1,620 27,743 2,897
Energy Service Co Inc + -- -- -- -- --
Ennis Business Forms Inc -- -- -- -- 247
Enron Oil & Gas Co -- -- -- -- --
Enterra Corp + -- -- -- -- 423
Equifax Inc 805 24,854 650 20,069 1,171
Equitable Co Inc -- -- 100 2,238 --
Equitable of Iowa Co -- -- -- -- --
Equity Residential Properties Trust -- -- -- -- --
Ethyl Corp 1,031 10,568 1,010 10,353 1,829
Exabyte Corp + -- -- -- -- 340
Family Dollar Stores Inc 620 8,060 480 6,240 857
Fastenal Co -- -- -- -- --
Federal Mogul Corp 396 7,722 300 5,850 553
Federal Realty Investment Trust -- -- -- -- --
Federal Signal Corp 498 10,209 390 7,995 707
Federated Department Stores Inc + -- -- 1,000 22,000 --
Ferro Corp 305 7,816 250 6,406 436
FHP International Corp + 424 11,395 340 9,138 603
Fifth Third Bancorp 663 34,145 530 27,295 951
Fingerhut Co 505 8,269 400 6,550 714
Finova Group Inc -- -- -- -- --
First America Bank Corp 647 21,917 510 17,276 909
First American Corp - Tennessee -- -- -- -- --
First Bancorp of Ohio Inc -- -- -- -- --
First Bank System Inc 1,266 49,216 990 38,486 1,789
First Brands Corp 243 9,113 190 7,125 347
First Empire State Corp -- -- -- -- --
First Financial Management Corp 662 45,761 420 29,033 949
First Hawaiian Inc -- -- -- -- --
<CAPTION>
LIFEPATH 2020 LIFEPATH 2030 LIFEPATH 2040
------------- --------------------------- ---------------------------
SECURITY NAME VALUE SHARES VALUE SHARES VALUE
<S> <C> <C> <C> <C> <C>
Delmarva Power & Light Co $ 17,947 648 $ 12,879 615 $ 12,223
Dentsply International Inc -- -- -- 200 6,650
Department 56 Inc + -- -- -- 200 7,750
Diamond Shamrock R&M Inc 10,875 330 8,250 315 7,875
Diebold Inc 16,662 341 12,063 325 11,497
Dole Food Inc 23,608 668 17,368 625 16,250
Dollar General Corp 23,769 495 17,201 464 16,124
Dr Pepper / Seven-Up Co Inc + -- -- -- 500 16,438
Duracell International Inc -- -- -- 700 29,138
Eckerd (Jack) Corp + -- -- -- 200 5,250
Edison Brothers Stores Inc 5,465 -- -- -- --
Edwards (A G) & Sons Inc 20,633 677 15,233 625 14,063
El Paso Natural Gas Co 17,097 411 12,638 385 11,839
Electronic Arts Inc + -- -- -- 500 10,750
EMC Corp + 49,611 2,107 36,082 1,280 21,920
Energy Service Co Inc + -- -- -- 500 5,875
Ennis Business Forms Inc 3,396 -- -- -- --
Enron Oil & Gas Co -- -- -- 400 8,350
Enterra Corp + 7,614 -- -- -- --
Equifax Inc 36,155 836 25,812 770 23,774
Equitable Co Inc -- -- -- 700 15,663
Equitable of Iowa Co -- -- -- 300 9,975
Equity Residential Properties Trust -- -- -- 200 5,425
Ethyl Corp 18,747 1,308 13,407 1,230 12,608
Exabyte Corp + 6,418 -- -- -- --
Family Dollar Stores Inc 11,141 627 8,151 595 7,735
Fastenal Co -- -- -- 200 9,350
Federal Mogul Corp 10,784 398 7,761 380 7,410
Federal Realty Investment Trust -- -- -- 300 6,338
Federal Signal Corp 14,494 502 10,291 480 9,840
Federated Department Stores Inc + -- -- -- 800 17,600
Ferro Corp 11,173 331 8,482 315 8,072
FHP International Corp + 16,206 436 11,718 409 10,992
Fifth Third Bancorp 48,977 686 35,329 435 22,403
Fingerhut Co 11,692 509 8,335 480 7,860
Finova Group Inc -- -- -- 300 10,050
First America Bank Corp 30,792 669 22,662 625 21,172
First American Corp - Tennessee -- -- -- 300 10,294
First Bancorp of Ohio Inc -- -- -- 300 7,050
First Bank System Inc 69,547 1,284 49,916 920 35,765
First Brands Corp 13,013 252 9,450 230 8,625
First Empire State Corp -- -- -- 100 16,550
First Financial Management Corp 65,600 684 47,282 435 30,069
First Hawaiian Inc -- -- -- 300 8,100
</TABLE>
50 51
<PAGE> 181
MASTER INVESTMENT PORTFOLIO--LIFEPATH MASTER SERIES
FEBRUARY 28, 1995
Portfolios of Investments
<TABLE>
<CAPTION>
LIFEPATH 2000 LIFEPATH 2010 LIFEPATH 2020
---------------------------- ---------------------------- -------------
SECURITY NAME SHARES VALUE SHARES VALUE SHARES
<S> <C> <C> <C> <C> <C>
COMMON STOCKS (CONTINUED)
First Security Corp 516 $ 13,029 420 $ 10,605 750
First Tennessee National Corp 354 14,691 270 11,205 485
First USA Inc -- -- 400 14,750 --
First Virginia Banks Inc 359 12,655 280 9,870 491
Firstar Corp -- -- 400 12,000 --
Fiserv Inc + 417 10,946 330 8,663 599
Flightsafety International 356 15,798 270 11,981 487
Florida Progress Corp 1,015 31,846 800 25,100 1,434
Flowers Industries Inc 404 7,424 320 5,880 586
Food Lion Inc Class A -- -- -- -- --
Food Lion Inc Class B -- -- -- -- --
Forest Labs Inc Class A + 482 24,462 370 18,778 666
Foundation Health Corp + 609 18,194 482 14,400 865
Fourth Financial Corp -- -- -- -- --
Franklin Resources Inc 896 34,720 700 27,125 1,263
Freeport-McMoRan Inc 1,529 27,522 1,180 21,240 2,107
Freeport-McMoRan Copper & Gold Inc 19 399 14 294 26
Frontier Corp 783 17,911 630 14,411 1,122
Fruit of the Loom Inc Class A + 814 19,027 650 15,194 1,154
Fuller (H B) Co -- -- -- -- 225
Fund American Enterprises Inc + -- -- -- -- --
GATX Corp 223 9,951 170 7,586 302
Gaylord Entertainment Co Class A -- -- -- -- --
GEICO Corp -- -- 300 14,663 --
GenCorp Inc -- -- -- -- 485
Genentech Inc + -- -- 400 20,100 --
General Instrument Corp + -- -- 600 19,050 --
General Motors Corp Class E 2,788 106,990 1,030 39,526 3,991
General Motors Corp Class H -- -- 700 26,338 --
General Nutrition Co Inc + -- -- -- -- --
Genzyme Corp - General Division + 263 10,191 210 8,138 367
Genzyme Corp - Tissue Repair + 35 140 -- -- 49
Geon Co + -- -- -- -- --
Georgia Gulf Corp 437 13,110 360 10,800 645
Gibson Greeting Inc -- -- -- -- 244
Glatfelter (P H) Co 486 8,870 380 6,935 669
Glenayre Technologies Inc + -- -- -- -- --
Global Marine Inc + -- -- -- -- 2,515
Goulds Pumps Inc -- -- -- -- 315
GP Financial Corp -- -- -- -- --
Granite Construction Inc -- -- -- -- 180
Green Tree Financial Inc -- -- 500 19,125 --
GTECH Holdings Corp + -- -- -- -- --
Hancock Fabrics -- -- -- -- 342
<CAPTION>
LIFEPATH 2020 LIFEPATH 2030 LIFEPATH 2040
------------- --------------------------- ---------------------------
SECURITY NAME VALUE SHARES VALUE SHARES VALUE
<S> <C> <C> <C> <C> <C>
First Security Corp $ 18,938 535 $ 13,509 500 $ 12,625
First Tennessee National Corp 20,128 350 14,525 340 14,110
First USA Inc -- -- -- 500 18,438
First Virginia Banks Inc 17,308 361 12,725 345 12,161
Firstar Corp -- -- -- 600 18,000
Fiserv Inc + 15,724 429 11,261 395 10,369
Flightsafety International 21,611 357 15,842 345 15,309
Florida Progress Corp 44,992 1,039 32,599 980 30,748
Flowers Industries Inc 10,768 416 7,644 385 7,074
Food Lion Inc Class A -- -- -- 2,200 12,375
Food Lion Inc Class B -- -- -- 1,600 9,400
Forest Labs Inc Class A + 33,800 486 24,665 260 13,195
Foundation Health Corp + 25,842 626 18,702 586 17,507
Fourth Financial Corp -- -- -- 300 9,919
Franklin Resources Inc 48,941 913 35,379 565 21,894
Freeport-McMoRan Inc 37,926 1,557 28,026 970 17,460
Freeport-McMoRan Copper & Gold Inc 546 19 399 18 378
Frontier Corp 25,666 797 18,231 750 17,156
Fruit of the Loom Inc Class A + 26,975 844 19,729 780 18,233
Fuller (H B) Co 7,481 -- -- -- --
Fund American Enterprises Inc + -- -- -- 100 7,463
GATX Corp 13,477 217 9,684 210 9,371
Gaylord Entertainment Co Class A -- -- -- 300 7,875
GEICO Corp -- -- -- 400 19,550
GenCorp Inc 6,548 -- -- -- --
Genentech Inc + -- -- -- 300 15,075
General Instrument Corp + -- -- -- 900 28,575
General Motors Corp Class E 153,155 2,876 110,367 1,700 65,238
General Motors Corp Class H -- -- -- 600 22,575
General Nutrition Co Inc + -- -- -- 400 9,600
Genzyme Corp - General Division + 14,221 272 10,540 250 9,688
Genzyme Corp - Tissue Repair + 196 36 144 33 132
Geon Co + -- -- -- 300 8,700
Georgia Gulf Corp 19,350 465 13,950 440 13,200
Gibson Greeting Inc 2,288 -- -- -- --
Glatfelter (P H) Co 12,209 489 8,924 470 8,578
Glenayre Technologies Inc + -- -- -- 200 8,050
Global Marine Inc + 10,374 -- -- -- --
Goulds Pumps Inc 6,773 -- -- -- --
GP Financial Corp -- -- -- 400 9,350
Granite Construction Inc 3,544 -- -- -- --
Green Tree Financial Inc -- -- -- 400 15,300
GTECH Holdings Corp + -- -- -- 400 7,950
Hancock Fabrics 3,933 -- -- -- --
</TABLE>
52 53
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FEBRUARY 28, 1995
Portfolios of Investments
<TABLE>
<CAPTION>
LIFEPATH 2000 LIFEPATH 2010 LIFEPATH 2020
---------------------------- ---------------------------- -------------
SECURITY NAME SHARES VALUE SHARES VALUE SHARES
<S> <C> <C> <C> <C> <C>
COMMON STOCKS (CONTINUED)
Hanna (M A) Co 387 $ 9,433 300 $ 7,313 545
Hannaford Brothers Co 436 11,227 360 9,270 645
Harley-Davidson Inc 818 22,086 650 17,550 1,159
Harsco Corp 269 11,634 210 9,083 374
Hartford Steam Boiler Inspection 230 9,775 180 7,650 309
Hawaiian Electric Industries Inc 292 9,636 240 7,920 423
HBO & Co -- -- -- -- --
Health & Retirement Property Trust -- -- -- -- --
Health Care & Retirement Corp + -- -- -- -- --
Health Care Property Investors Inc -- -- -- -- --
Health Management Associates Inc Class A + -- -- -- -- --
HealthCare Compare Corp + 384 12,192 290 9,208 516
Healthsource Inc + -- -- -- -- --
Healthsouth Rehabilitation Corp + 304 12,236 250 10,063 460
Healthtrust Inc + -- -- 500 18,125 --
Heilig-Meyers Co 524 12,380 410 9,686 734
Hibernia Corp Class A -- -- -- -- --
Hillenbrand Industries Inc -- -- -- -- --
Home Shopping Network Inc + 1,025 9,097 810 7,189 1,444
HON Industries Inc 353 10,590 270 8,100 484
Hormel Foods Corp -- -- -- -- --
Hospitality Franchise Systems Inc + -- -- -- -- --
Host Marriot Corp + -- -- -- -- --
Houghton Mifflin Co 152 6,536 120 5,160 230
Hubbell Inc Class B 366 19,764 283 15,282 504
Humana Inc + -- -- 1,300 30,875 --
Hunt (J B) Transport Services -- -- -- -- 596
Huntington Bancshares Inc -- -- 1,000 18,500 --
IBP Inc 516 16,448 410 13,069 726
ICN Pharmaceuticals Inc -- -- -- -- --
Idaho Power Co 402 10,100 320 8,040 585
IES Industries Inc -- -- -- -- --
Illinois Central Corp 474 16,057 360 12,195 657
Illinova Corp 813 19,004 650 15,194 1,153
IMC Fertilizer Group + 309 14,446 250 11,688 465
Indiana Energy Inc -- -- -- -- 352
Infinity Broadcasting Corp Class A + -- -- -- -- --
Information Resources Inc + -- -- -- -- 403
Informix Corp + 695 26,236 560 21,140 1,009
Integra Financial Corp -- -- -- -- --
Integrated Device Technology Inc + -- -- -- -- --
Intelligent Electronics -- -- -- -- 540
International Dairy Queen Class A + -- -- -- -- 369
<CAPTION>
LIFEPATH 2020 LIFEPATH 2030 LIFEPATH 2040
------------- --------------------------- ---------------------------
SECURITY NAME VALUE SHARES VALUE SHARES VALUE
<S> <C> <C> <C> <C> <C>
Hanna (M A) Co $ 13,284 400 $ 9,750 375 $ 9,141
Hannaford Brothers Co 16,609 465 11,974 440 11,330
Harley-Davidson Inc 31,293 844 22,788 790 21,330
Harsco Corp 16,176 279 12,067 260 11,245
Hartford Steam Boiler Inspection 13,133 224 9,520 220 9,350
Hawaiian Electric Industries Inc 13,959 303 9,999 280 9,240
HBO & Co -- -- -- 300 11,550
Health & Retirement Property Trust -- -- -- 500 7,250
Health Care & Retirement Corp + -- -- -- 300 9,300
Health Care Property Investors Inc -- -- -- 300 9,000
Health Management Associates Inc Class A + -- -- -- 300 7,988
HealthCare Compare Corp + 16,383 396 12,573 365 11,589
Healthsource Inc + -- -- -- 300 13,050
Healthsouth Rehabilitation Corp + 18,515 330 13,283 315 12,679
Healthtrust Inc + -- -- -- 500 18,125
Heilig-Meyers Co 17,341 544 12,852 500 11,813
Hibernia Corp Class A -- -- -- 1,100 8,525
Hillenbrand Industries Inc -- -- -- 300 8,438
Home Shopping Network Inc + 12,816 1,049 9,310 980 8,698
HON Industries Inc 14,520 354 10,620 335 10,050
Hormel Foods Corp -- -- -- 400 10,700
Hospitality Franchise Systems Inc + -- -- -- 300 8,513
Host Marriot Corp + -- -- -- 1,200 13,200
Houghton Mifflin Co 9,890 155 6,665 145 6,235
Hubbell Inc Class B 27,216 367 19,818 151 8,154
Humana Inc + -- -- -- 1,100 26,125
Hunt (J B) Transport Services 11,622 -- -- -- --
Huntington Bancshares Inc -- -- -- 900 16,650
IBP Inc 23,141 521 16,607 500 15,938
ICN Pharmaceuticals Inc -- -- -- 500 7,188
Idaho Power Co 14,698 415 10,427 385 9,673
IES Industries Inc -- -- -- 300 8,213
Illinois Central Corp 22,256 477 16,158 435 14,736
Illinova Corp 26,951 843 19,705 780 18,233
IMC Fertilizer Group + 21,739 335 15,661 300 14,025
Indiana Energy Inc 6,600 -- -- -- --
Infinity Broadcasting Corp Class A + -- -- -- 300 10,575
Information Resources Inc + 6,095 -- -- -- --
Informix Corp + 38,090 719 27,142 390 14,723
Integra Financial Corp -- -- -- 300 12,825
Integrated Device Technology Inc + -- -- -- 300 11,438
Intelligent Electronics 4,995 -- -- -- --
International Dairy Queen Class A + 6,642 -- -- -- --
</TABLE>
54 55
<PAGE> 183
MASTER INVESTMENT PORTFOLIO--LIFEPATH MASTER SERIES
FEBRUARY 28, 1995
Portfolios of Investments
<TABLE>
<CAPTION>
LIFEPATH 2000 LIFEPATH 2010 LIFEPATH 2020
---------------------------- ---------------------------- -------------
SECURITY NAME SHARES VALUE SHARES VALUE SHARES
<S> <C> <C> <C> <C> <C>
COMMON STOCKS (CONTINUED)
International Game Technology 1,397 $ 19,558 1,100 $ 15,400 1,972
International Multifoods Corp -- -- -- -- 274
International Technology Corp + -- -- -- -- 551
Intuit Inc + -- -- -- -- --
Iowa Illinois Gas & Electric Co 307 6,677 250 5,438 463
IPALCO Enterprises Inc 405 13,314 320 10,520 588
ITEL Corp + -- -- -- -- --
IVAX Corp 930 20,111 740 16,003 1,323
Jacobs Engineering Group Inc + -- -- -- -- 373
Jefferson Smurfit Corp + -- -- 900 17,663 --
John Alden Financial Corp -- -- -- -- --
Kansas City Power & Light Co 667 15,925 530 12,654 955
Kansas City Southern Industries 481 17,737 370 13,644 665
Kaydon Corp -- -- -- -- 250
Kelly Services Inc Class A 406 12,891 320 10,160 589
Kemper Corp 363 14,611 290 11,673 520
Kennametal Inc -- -- -- -- 411
Keystone International Inc 383 7,133 300 5,588 541
KLA Instruments Corp + -- -- -- -- --
Kohls Corp + 393 16,113 310 12,710 552
La Quinta Inns Inc -- -- -- -- --
Lafarge Corp -- -- -- -- --
Laidlaw Inc Class B -- -- -- -- 4,261
Lam Research Corp + -- -- -- -- --
Lancaster Colony Corp 338 11,577 260 8,905 470
Lance Inc -- -- -- -- 478
Lands' End Inc + -- -- -- -- 547
Lawson Products Inc -- -- -- -- 197
Lawter International Inc -- -- -- -- 677
LDDS Communications + 1,308 30,656 1,030 24,141 1,858
Lee Enterprises Inc 249 8,995 -- -- 354
Legent Corp + 373 10,817 300 8,700 531
Leggett & Platt Inc 429 17,535 350 14,306 637
Lehman Brothers Holdings -- -- 800 14,500 --
Leucadia National Corp -- -- -- -- --
LG&E Energy Corp 364 14,151 280 10,885 496
LIN Broadcasting Corp + -- -- 200 25,875 --
Lincoln Telecommunications -- -- -- -- 490
Linear Technology Corp 393 21,419 310 16,895 550
Litton Industries Inc + 501 18,287 390 14,235 708
Loctite Corp 385 17,710 300 13,800 542
Loews Corp -- -- 300 29,138 --
Lone Star Steakhouse & Saloon + -- -- -- -- --
Longview Fibre Co 554 9,834 440 7,810 790
<CAPTION>
LIFEPATH 2020 LIFEPATH 2030 LIFEPATH 2040
------------- --------------------------- ---------------------------
SECURITY NAME VALUE SHARES VALUE SHARES VALUE
<S> <C> <C> <C> <C> <C>
COMMON STOCKS (CONTINUED)
International Game Technology $ 27,608 1,417 $ 19,838 1,345 $ 18,830
International Multifoods Corp 5,103 -- -- -- --
International Technology Corp + 1,515 -- -- -- --
Intuit Inc + -- -- -- 100 6,625
Iowa Illinois Gas & Electric Co 10,070 333 7,243 315 6,851
IPALCO Enterprises Inc 19,331 418 13,742 385 12,657
ITEL Corp + -- -- -- 200 6,975
IVAX Corp 28,610 963 20,825 895 19,354
Jacobs Engineering Group Inc + 7,367 -- -- -- --
Jefferson Smurfit Corp + -- -- -- 700 13,738
John Alden Financial Corp -- -- -- 300 8,625
Kansas City Power & Light Co 22,801 690 16,474 645 15,399
Kansas City Southern Industries 24,522 485 17,884 460 16,963
Kaydon Corp 6,875 -- -- -- --
Kelly Services Inc Class A 18,701 419 13,303 385 12,224
Kemper Corp 20,930 365 14,691 345 13,886
Kennametal Inc 11,097 -- -- -- --
Keystone International Inc 10,076 396 7,376 365 6,798
KLA Instruments Corp + -- -- -- 200 11,600
Kohls Corp + 22,632 404 16,564 379 15,539
La Quinta Inns Inc -- -- -- 300 7,463
Lafarge Corp -- -- -- 300 5,363
Laidlaw Inc Class B 34,621 -- -- -- --
Lam Research Corp + -- -- -- 200 8,000
Lancaster Colony Corp 16,098 340 11,645 328 11,234
Lance Inc 8,246 -- -- -- --
Lands' End Inc + 9,094 -- -- -- --
Lawson Products Inc 5,221 -- -- -- --
Lawter International Inc 8,716 -- -- -- --
LDDS Communications + 43,547 1,343 31,477 1,260 29,531
Lee Enterprises Inc 12,788 255 9,212 -- --
Legent Corp + 15,399 386 11,194 355 10,295
Leggett & Platt Inc 26,037 442 18,067 415 16,963
Lehman Brothers Holdings -- -- -- 700 12,688
Leucadia National Corp -- -- -- 200 9,325
LG&E Energy Corp 19,282 366 14,228 345 13,412
LIN Broadcasting Corp + -- -- -- 300 38,813
Lincoln Telecommunications 7,963 -- -- -- --
Linear Technology Corp 29,975 405 22,073 375 20,438
Litton Industries Inc + 25,842 503 18,360 479 17,484
Loctite Corp 24,932 397 18,262 365 16,790
Loews Corp -- -- -- 400 38,850
Lone Star Steakhouse & Saloon + -- -- -- 200 4,950
Longview Fibre Co 14,023 575 10,206 530 9,408
</TABLE>
56 57
<PAGE> 184
MASTER INVESTMENT PORTFOLIO--LIFEPATH MASTER SERIES
FEBRUARY 28, 1995
Portfolios of Investments
<TABLE>
<CAPTION>
LIFEPATH 2000 LIFEPATH 2010 LIFEPATH 2020
---------------------------- ---------------------------- -------------
SECURITY NAME SHARES VALUE SHARES VALUE SHARES
<S> <C> <C> <C> <C> <C>
COMMON STOCKS (CONTINUED)
LSI Logic Corp + 536 $ 29,212 430 $ 23,435 771
LTV Corp + -- -- 800 12,300 --
Lubrizol Corp 729 24,422 560 18,760 1,017
Lukens Inc -- -- -- -- 230
Lyondell Petrochemical 876 21,134 680 16,405 1,217
Magma Power Co + 112 4,319 90 3,471 157
MagneTek Inc + -- -- -- -- 367
Manpower Inc -- -- 600 17,550 --
MAPCO Inc 337 18,409 260 14,203 468
Marion Merrell Dow Inc -- -- 600 14,925 --
Mark IV Industries Inc 474 9,480 370 7,400 658
Marshall & Ilsley Corp 1,058 21,954 840 17,430 1,503
Marvel Entertainment Group Inc + -- -- -- -- --
Maxim Integrated Products Inc + -- -- -- -- --
MAXXAM Inc + -- -- -- -- 128
MBIA Inc -- -- 300 18,600 --
McCormick & Co Inc 888 19,647 700 15,488 1,255
McFrugals Bargains Closeouts + -- -- -- -- 438
McKesson Corp -- -- -- -- --
MCN Corp 616 11,319 500 9,188 930
Measurex Corp -- -- -- -- 286
Media General Inc Class A 280 8,820 220 6,930 410
Meditrust Corp -- -- -- -- --
Mentor Graphics Corp + -- -- -- -- 752
Mercantile Bancorp 436 16,078 370 13,644 669
Mercantile Bankshares 503 10,500 390 8,141 713
Mercury Financial Corp -- -- -- -- --
Mercury General Corp -- -- -- -- --
Meridian Bancorp Inc 635 19,447 490 15,006 897
Meyer (Fred) Inc + -- -- -- -- --
MFS Communications Inc + -- -- -- -- --
MGIC Investment Corp -- -- 400 15,250 --
Michael Foods Inc -- -- -- -- 229
Michaels Stores Inc + -- -- -- -- --
Michigan National Corp -- -- -- -- --
Micro Warehouse Inc + -- -- -- -- --
Microchip Technology Inc + -- -- -- -- --
Mid-American Waste Systems Inc + -- -- -- -- 372
Mid Atlantic Medical Services + -- -- -- -- --
Midlantic Corp Inc -- -- 100 3,075 --
Miller (Herman) Inc 269 5,884 210 4,594 374
Minnesota Power & Light Co 349 9,030 270 6,986 480
Mirage Resorts Inc + 995 23,756 780 18,623 1,389
Modine Manufacturing Co 309 10,120 250 8,188 465
<CAPTION>
LIFEPATH 2020 LIFEPATH 2030 LIFEPATH 2040
------------- --------------------------- ---------------------------
SECURITY NAME VALUE SHARES VALUE SHARES VALUE
<S> <C> <C> <C> <C> <C>
LSI Logic Corp + $ 42,020 556 $ 30,302 310 $ 16,895
LTV Corp + -- -- -- 1,100 16,913
Lubrizol Corp 34,070 742 24,857 500 16,750
Lukens Inc 6,584 -- -- -- --
Lyondell Petrochemical 29,360 892 21,520 845 20,386
Magma Power Co + 6,054 116 4,473 107 4,126
MagneTek Inc + 5,322 -- -- -- --
Manpower Inc -- -- -- 500 14,625
MAPCO Inc 25,565 338 18,463 300 16,388
Marion Merrell Dow Inc -- -- -- 900 22,388
Mark IV Industries Inc 13,160 478 9,560 435 8,700
Marshall & Ilsley Corp 31,187 1,083 22,472 1,020 21,165
Marvel Entertainment Group Inc + -- -- -- 400 6,250
Maxim Integrated Products Inc + -- -- -- 300 9,863
MAXXAM Inc + 3,680 -- -- -- --
MBIA Inc -- -- -- 400 24,800
McCormick & Co Inc 27,767 905 20,023 855 18,917
McFrugals Bargains Closeouts + 7,446 -- -- -- --
McKesson Corp -- -- -- 300 11,063
MCN Corp 17,089 670 12,311 600 11,025
Measurex Corp 6,828 -- -- -- --
Media General Inc Class A 12,915 290 9,135 270 8,505
Meditrust Corp -- -- -- 300 9,600
Mentor Graphics Corp + 9,964 -- -- -- --
Mercantile Bancorp 24,669 464 17,110 440 16,225
Mercantile Bankshares 14,884 508 10,605 480 10,020
Mercury Financial Corp -- -- -- 800 12,800
Mercury General Corp -- -- -- 200 6,250
Meridian Bancorp Inc 27,471 642 19,661 605 18,528
Meyer (Fred) Inc + -- -- -- 200 6,375
MFS Communications Inc + -- -- -- 200 6,950
MGIC Investment Corp -- -- -- 600 22,875
Michael Foods Inc 2,748 -- -- -- --
Michaels Stores Inc + -- -- -- 200 6,200
Michigan National Corp -- -- -- 100 10,188
Micro Warehouse Inc + -- -- -- 100 2,875
Microchip Technology Inc + -- -- -- 400 10,100
Mid-American Waste Systems Inc + 2,093 -- -- -- --
Mid Atlantic Medical Services + -- -- -- 400 8,200
Midlantic Corp Inc -- -- -- 500 15,375
Miller (Herman) Inc 8,181 279 6,103 260 5,688
Minnesota Power & Light Co 12,420 350 9,056 335 8,668
Mirage Resorts Inc + 33,162 1,004 23,971 935 22,323
Modine Manufacturing Co 15,229 335 10,971 300 9,825
</TABLE>
58 59
<PAGE> 185
MASTER INVESTMENT PORTFOLIO--LIFEPATH MASTER SERIES
FEBRUARY 28, 1995
Portfolios of Investments
<TABLE>
<CAPTION>
LIFEPATH 2000 LIFEPATH 2010 LIFEPATH 2020
---------------------------- ---------------------------- -------------
SECURITY NAME SHARES VALUE SHARES VALUE SHARES
<S> <C> <C> <C> <C> <C>
COMMON STOCKS (CONTINUED)
Molex Inc 851 $ 28,721 675 $ 22,781 1,211
Molex Inc Class A -- -- -- -- --
Montana Power Co 563 13,371 460 10,925 824
Morgan Stanley Group 874 58,886 370 24,929 1,191
Morrison Restaurants + 385 10,299 300 8,025 543
Multimedia Inc + 401 15,238 320 12,160 584
Murphy Oil Corp 493 21,569 380 16,625 677
Mylan Laboratories 869 27,156 680 21,250 1,210
Nabisco Holdings Corp Class A + -- -- -- -- --
Nabors Industries Inc + -- -- -- -- 1,285
National Education Corp + 52 156 118 354 270
National Fuel Gas Co 400 10,900 320 8,720 582
National Gypsum Co + -- -- -- -- --
National Health Labs Inc + 917 12,723 720 9,990 1,310
National Pizza Company + -- -- -- -- 374
National Presto Industries Inc -- -- -- -- 116
NCH Corp -- -- -- -- 124
Nellcor Inc + -- -- -- -- 250
Network Systems Corp + 311 1,749 250 1,406 467
Nevada Power Co 444 9,213 360 7,470 652
New England Electric System 695 22,935 560 18,480 1,008
New Plan Realty Trust -- -- -- -- --
New World Communications Group Inc + -- -- -- -- --
New York State Electric & Gas 772 16,598 610 13,115 1,087
NEXTEL Communications Class A + 1,068 12,950 880 10,670 1,588
Nine West Group Inc + -- -- -- -- --
NIPSCO Industries Inc 702 22,201 560 17,710 1,015
Noble Affiliates Inc 538 13,719 430 10,965 773
Nordson Corp 214 11,931 160 8,920 293
Northeast Utilities 1,340 30,485 1,070 24,343 1,916
Northern Trust Corp 567 19,278 460 15,640 828
Northwest Airlines Corp Class A + -- -- -- -- --
Novacare Corp + -- -- -- -- 975
Novellus Systems Inc + -- -- -- -- --
Octel Communications Corp + -- -- -- -- 365
OEA Inc -- -- -- -- 308
Office Depot Inc + 1,538 35,951 1,250 29,219 2,242
Officemax Inc + -- -- -- -- --
Ohio Casualty Corp -- -- -- -- --
Oklahoma Gas & Electric Co 429 15,176 340 12,028 612
Old Kent Financial Corp -- -- -- -- --
Old National Bancorp -- -- -- -- --
Old Republic International Corp -- -- -- -- --
<CAPTION>
LIFEPATH 2020 LIFEPATH 2030 LIFEPATH 2040
------------- --------------------------- ---------------------------
SECURITY NAME VALUE SHARES VALUE SHARES VALUE
<S> <C> <C> <C> <C> <C>
COMMON STOCKS (CONTINUED)
Molex Inc $ 40,871 880 $ 29,700 318 $ 10,733
Molex Inc Class A -- -- -- 400 12,700
Montana Power Co 19,570 584 13,870 540 12,825
Morgan Stanley Group 80,244 891 60,031 545 36,719
Morrison Restaurants + 14,525 398 10,647 375 10,031
Multimedia Inc + 22,192 414 15,732 385 14,630
Murphy Oil Corp 29,619 497 21,744 470 20,563
Mylan Laboratories 37,813 885 27,656 535 16,719
Nabisco Holdings Corp Class A + -- -- -- 400 11,100
Nabors Industries Inc + 8,513 29 192 -- --
National Education Corp + 810 212 636 353 1,059
National Fuel Gas Co 15,860 412 11,227 385 10,491
National Gypsum Co + -- -- -- 200 9,850
National Health Labs Inc + 18,176 950 13,181 885 12,279
National Pizza Company + 2,338 284 1,775 -- --
National Presto Industries Inc 4,930 81 3,443 -- --
NCH Corp 7,595 89 5,451 -- --
Nellcor Inc + 8,500 175 5,950 -- --
Network Systems Corp + 2,627 327 1,839 250 1,406
Nevada Power Co 13,529 472 9,794 450 9,338
New England Electric System 33,264 718 23,694 690 22,770
New Plan Realty Trust -- -- -- 500 10,438
New World Communications Group In c + -- -- -- 300 4,725
New York State Electric & Gas 23,371 787 16,921 740 15,910
NEXTEL Communications Class A + 19,255 1,101 13,350 1,025 12,428
Nine West Group Inc + -- -- -- 200 5,625
NIPSCO Industries Inc 32,099 740 23,403 675 21,347
Noble Affiliates Inc 19,712 558 14,229 520 13,260
Nordson Corp 16,335 208 11,596 185 10,314
Northeast Utilities 43,589 1,386 31,532 1,290 29,348
Northern Trust Corp 28,152 588 19,992 565 19,210
Northwest Airlines Corp Class A + -- -- -- 500 12,313
Novacare Corp + 8,409 710 6,124 -- --
Novellus Systems Inc + -- -- -- 200 10,550
Octel Communications Corp + 8,486 270 6,278 -- --
OEA Inc 7,700 223 5,575 -- --
Office Depot Inc + 52,407 1,567 36,629 980 22,908
Officemax Inc + -- -- -- 400 10,000
Ohio Casualty Corp -- -- -- 200 6,750
Oklahoma Gas & Electric Co 21,650 442 15,636 415 14,681
Old Kent Financial Corp -- -- -- 400 12,650
Old National Bancorp -- -- -- 200 7,000
Old Republic International Corp -- -- -- 400 9,900
</TABLE>
60 61
<PAGE> 186
MASTER INVESTMENT PORTFOLIO--LIFEPATH MASTER SERIES
FEBRUARY 28, 1995
Portfolios of Investments
<TABLE>
<CAPTION>
LIFEPATH 2000 LIFEPATH 2010 LIFEPATH 2020
---------------------------- ---------------------------- -------------
SECURITY NAME SHARES VALUE SHARES VALUE SHARES
<S> <C> <C> <C> <C> <C>
COMMON STOCKS (CONTINUED)
Olin Corp 235 $ 11,956 180 $ 9,158 339
Olsten Corp 461 15,847 350 12,031 645
Omnicom Group 394 20,931 310 16,469 560
Oregon Steel Mills Inc -- -- -- -- 299
Outback Steakhouse Inc + -- -- -- -- --
Overseas Shipholding Group 393 9,088 310 7,169 550
Owens-Illinois Inc + -- -- -- -- --
Oxford Health Plans Inc + -- -- -- -- --
PacifiCare Health Systems Inc Class A + 289 20,013 240 16,620 420
PacifiCare Health Systems Inc Class B + -- -- -- -- --
Paging Network Inc + -- -- -- -- --
Painewebber Group Inc -- -- -- -- --
Parametric Technology Corp + 610 23,333 480 18,360 871
Parker & Parsley Petroleum 376 6,862 297 5,420 534
Parker Drilling Co + -- -- -- -- 844
Paychex Inc 337 13,817 260 10,660 468
Pentair Inc -- -- -- -- 288
Perrigo Co + 812 11,267 650 9,019 1,152
PetSmart Inc + -- -- -- -- --
PHH Corp 178 6,675 150 5,625 257
Phillips Van Heusen Corp -- -- -- -- 410
Physician Corp of America + -- -- -- -- --
Pinnacle West Capital Corp 941 20,232 750 16,125 1,334
Policy Management Systems Corp + 248 11,191 170 7,671 303
Portland General Corp 540 11,003 430 8,761 775
Potomac Electric Power Co 1,282 24,839 1,010 19,569 1,806
Precision Castparts Corp -- -- -- -- 300
Premier Industrial Corp -- -- -- -- --
Primadonna Resorts Inc + -- -- -- -- --
Progressive Corp Ohio 782 30,400 620 24,103 1,097
Property Trust of America -- -- -- -- --
Provident Life & Accident Insurance Class B + 497 11,680 390 9,165 706
Public Service Company of Colorado 661 20,243 530 16,231 949
Public Service Company of New Mexico + -- -- -- -- 650
Puget Sound Power & Light Co 683 14,770 540 11,678 971
Quaker State Corp -- -- -- -- 419
Qualcomm Inc + -- -- -- -- --
Quantum Corp + -- -- -- -- 690
Questar Corp 427 12,330 340 9,818 610
Ranger Oil Ltd -- -- -- -- 1,508
<CAPTION>
LIFEPATH 2020 LIFEPATH 2030 LIFEPATH 2040
------------- --------------------------- ---------------------------
SECURITY NAME VALUE SHARES VALUE SHARES VALUE
<S> <C> <C> <C> <C> <C>
Olin Corp $ 17,247 229 $ 11,650 230 $ 11,701
Olsten Corp 22,172 459 15,778 444 15,263
Omnicom Group 29,750 405 21,516 379 20,134
Oregon Steel Mills Inc 4,971 199 3,308 -- --
Outback Steakhouse Inc + -- -- -- 300 7,838
Overseas Shipholding Group 12,719 405 9,366 375 8,672
Owens-Illinois Inc + -- -- -- 900 9,450
Oxford Health Plans Inc + -- -- -- 100 9,100
PacifiCare Health Systems Inc Cla ss A + 29,085 300 20,775 80 5,540
PacifiCare Health Systems Inc Cla ss B + -- -- -- 100 7,025
Paging Network Inc + -- -- -- 300 9,975
Painewebber Group Inc -- -- -- 700 12,163
Parametric Technology Corp + 33,316 621 23,753 385 14,726
Parker & Parsley Petroleum 9,746 386 7,045 362 6,607
Parker Drilling Co + 4,115 619 3,018 -- --
Paychex Inc 19,188 338 13,858 300 12,300
Pentair Inc 12,366 203 8,716 -- --
Perrigo Co + 15,984 842 11,683 780 10,823
PetSmart Inc + -- -- -- 300 10,425
PHH Corp 9,638 197 7,388 175 6,563
Phillips Van Heusen Corp 6,868 290 4,858 -- --
Physician Corp of America + -- -- -- 400 8,900
Pinnacle West Capital Corp 28,681 974 20,941 905 19,458
Policy Management Systems Corp + 13,673 258 11,642 240 10,830
Portland General Corp 15,791 560 11,410 520 10,595
Potomac Electric Power Co 34,991 1,316 25,498 1,230 23,831
Precision Castparts Corp 6,975 213 4,952 -- --
Premier Industrial Corp -- -- -- 400 9,550
Primadonna Resorts Inc + -- -- -- 300 6,975
Progressive Corp Ohio 42,646 797 30,983 450 17,494
Property Trust of America -- -- -- 500 8,375
Provident Life & Accident Insuran ce Class B + 16,591 501 11,774 480 11,280
Public Service Company of Colorad o 29,063 684 20,948 635 19,447
Public Service Company of New Mex ico + 8,369 470 6,051 -- --
Puget Sound Power & Light Co 20,998 706 15,267 655 14,164
Quaker State Corp 6,076 299 4,336 -- --
Qualcomm Inc + -- -- -- 300 8,775
Quantum Corp + 10,178 485 7,154 -- --
Questar Corp 17,614 440 12,705 430 12,416
Ranger Oil Ltd 8,860 1,103 6,480 -- --
</TABLE>
62 63
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FEBRUARY 28, 1995
Portfolios of Investments
<TABLE>
<CAPTION>
LIFEPATH 2000 LIFEPATH 2010 LIFEPATH 2020
---------------------------- ---------------------------- -------------
SECURITY NAME SHARES VALUE SHARES VALUE SHARES
<S> <C> <C> <C> <C> <C>
COMMON STOCKS (CONTINUED)
Rayonier Inc 256 $ 7,680 250 $ 7,500 462
Readers Digest Association Class A -- -- 600 27,600 --
Readers Digest Association Class B -- -- -- -- --
Regions Financial 435 14,355 350 11,550 619
Reliastar Financial Corp -- -- -- -- --
Republic New York Corp -- -- 300 14,963 --
Revco DS Inc + -- -- -- -- --
Reynolds & Reynolds Co Class A 473 13,067 360 9,945 656
Rhone-Poulenc Rorer Inc -- -- 300 12,225 --
RJR Nabisco Holdings Corp + 854 4,804 7,717 43,408 3,526
Rohr Industries Inc + -- -- -- -- 287
Rollins Inc 388 9,797 310 7,828 545
Rouse Co -- -- -- -- --
RPM Inc 623 11,448 490 9,004 859
Ruddick Corp -- -- -- -- 357
Safeway Inc + -- -- -- -- --
Savannah Foods & Industries -- -- -- -- 410
Sbarro Inc -- -- -- -- 319
SCANA Corp 513 22,636 410 18,091 723
Scherer (R P) Corp + -- -- -- -- --
Schulman (A) Inc 403 11,486 320 9,120 586
Schwab (Charles) Corp 626 27,779 490 21,744 862
Scripps (E W) Co -- -- -- -- --
Seagate Technology Inc + 778 18,672 610 14,640 1,093
Seagull Energy Corp + 391 6,598 310 5,231 548
Sealed Air Corp -- -- -- -- 303
Sensormatic Electronics 735 20,856 570 16,174 1,023
Sequa Corp Class A 110 3,094 -- -- 137
Sequent Computer Systems + 340 5,823 -- -- 471
Service Merchandise Co + 771 3,759 -- -- 1,516
Shaw Industries Inc 1,560 24,375 1,230 19,219 2,215
Signet Banking Corp -- -- 500 18,188 --
Simon Property Group Inc -- -- -- -- --
Sizzler International Inc 254 1,619 -- -- 434
Smith International Inc 414 5,537 -- -- 597
Smucker (J M) Co Class A 305 7,168 -- -- 436
Solectron Corp + -- -- -- -- --
Sonoco Products + 941 22,819 740 17,945 1,334
Sotheby's Holdings Inc Class A 611 6,874 -- -- 848
Southdown Inc + 175 2,888 -- -- 253
Southern National Corp -- -- -- -- --
Southern New England Telecom Corp 687 22,757 550 18,219 975
Southern Pacific Rail Corp + -- -- -- -- --
Southland Corp + -- -- -- -- --
<CAPTION>
LIFEPATH 2020 LIFEPATH 2030 LIFEPATH 2040
------------- --------------------------- ---------------------------
SECURITY NAME VALUE SHARES VALUE SHARES VALUE
<S> <C> <C> <C> <C> <C>
Rayonier Inc $ 13,860 326 $ 9,780 319 $ 9,570
Readers Digest Association Class A -- -- -- 600 27,600
Readers Digest Association Class B -- -- -- 200 8,400
Regions Financial 20,427 464 15,312 440 14,520
Reliastar Financial Corp -- -- -- 300 10,238
Republic New York Corp -- -- -- 400 19,950
Revco DS Inc + -- -- -- 400 7,350
Reynolds & Reynolds Co Class A 18,122 476 13,150 450 12,431
Rhone-Poulenc Rorer Inc -- -- -- 500 20,375
RJR Nabisco Holdings Corp + 19,834 2,557 14,383 7,593 42,711
Rohr Industries Inc + 3,229 207 2,329 -- --
Rollins Inc 13,761 400 10,100 375 9,469
Rouse Co -- -- -- 500 9,875
RPM Inc 15,784 629 11,558 595 10,933
Ruddick Corp 7,274 262 5,338 -- --
Safeway Inc + -- -- -- 300 10,763
Savannah Foods & Industries 5,381 290 3,806 -- --
Sbarro Inc 7,816 219 5,366 -- --
SCANA Corp 31,902 518 22,857 490 21,621
Scherer (R P) Corp + -- -- -- 200 9,175
Schulman (A) Inc 16,701 416 11,856 385 10,973
Schwab (Charles) Corp 38,251 632 28,045 405 17,972
Scripps (E W) Co -- -- -- 200 5,825
Seagate Technology Inc + 26,232 793 19,032 750 18,000
Seagull Energy Corp + 9,248 403 6,801 375 6,328
Sealed Air Corp 12,688 218 9,129 -- --
Sensormatic Electronics 29,028 748 21,225 685 19,437
Sequa Corp Class A 3,853 102 2,869 -- --
Sequent Computer Systems + 8,066 341 5,840 -- --
Service Merchandise Co + 7,391 1,111 5,416 -- --
Shaw Industries Inc 34,609 1,605 25,078 1,000 15,625
Signet Banking Corp -- -- -- 500 18,188
Simon Property Group Inc -- -- -- 300 7,313
Sizzler International Inc 2,767 319 2,034 -- --
Smith International Inc 7,985 427 5,711 -- --
Smucker (J M) Co Class A 10,246 331 7,779 -- --
Solectron Corp + -- -- -- 400 9,650
Sonoco Products + 32,350 974 23,620 905 21,946
Sotheby's Holdings Inc Class A 9,540 623 7,009 -- --
Southdown Inc + 4,175 178 2,937 -- --
Southern National Corp -- -- -- 500 11,188
Southern New England Telecom Corp 32,297 710 23,519 680 22,525
Southern Pacific Rail Corp + -- -- -- 700 12,513
Southland Corp + -- -- -- 1,600 6,650
</TABLE>
64 65
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MASTER INVESTMENT PORTFOLIO--LIFEPATH MASTER SERIES
FEBRUARY 28, 1995
Portfolios of Investments
<TABLE>
<CAPTION>
LIFEPATH 2000 LIFEPATH 2010 LIFEPATH 2020
---------------------------- ---------------------------- -------------
SECURITY NAME SHARES VALUE SHARES VALUE SHARES
<S> <C> <C> <C> <C> <C>
COMMON STOCKS (CONTINUED)
SouthTrust Corp 871 $ 17,964 680 $ 14,025 1,237
Southwestern Public Service Co 433 12,611 350 10,194 617
St Joe Paper Co -- -- -- -- --
Standard Federal Bank -- -- -- -- --
Standard Register Co 301 5,249 -- -- 432
Stanhome Inc 220 6,160 170 4,760 299
Staples Inc + 621 15,059 510 12,368 895
Star Banc Corp -- -- -- -- --
Starbucks Corp + -- -- -- -- --
State Street Boston Corp 819 26,106 650 20,719 1,185
Sterling Chemicals Inc + 612 6,885 -- -- 849
Stewart & Stevenson Services 364 12,012 280 9,240 495
Stop & Shop Co Inc + -- -- -- -- --
Storage Technology Corp + 478 10,397 370 8,048 662
Stratacom Inc + -- -- -- -- --
Strattec Security Corp + 10 128 28 362 72
Stratus Computer Inc + 261 6,884 210 5,539 366
Structural Dynamics Research + 303 2,235 -- -- 434
Stryker Corp 524 22,794 410 17,835 734
Student Loan Marketing Association -- -- 700 25,813 --
Sunamerica Inc -- -- -- -- --
Sunbeam-Oster Co Inc -- -- -- -- --
Sundstrand Corp 363 16,607 280 12,810 495
Sungard Data Systems Inc + -- -- -- -- --
Superior Industries International Inc 322 8,775 260 7,085 454
Surgical Care Affiliates + 415 8,715 -- -- 598
Sybase Inc + -- -- 300 12,225 --
Sybron International Corp + -- -- -- -- --
Symantec Corp + 378 7,466 -- -- 536
Symbol Technologies Inc + 260 6,793 210 5,486 390
Synovus Financial Corp -- -- -- -- --
T Rowe Price Associates -- -- -- -- --
Tambrands Inc 397 17,170 310 13,408 554
TCA Cable TV Inc 266 6,949 -- -- 371
TECO Energy Inc 1,265 27,198 990 21,285 1,789
Tecumseh Products Co Class A 241 11,267 190 8,883 345
Teleflex Inc 175 6,497 -- -- 254
Telephone & Data Systems Inc 566 25,824 450 20,531 827
Tellabs Inc + -- -- 300 15,600 --
Teradyne Inc + 388 14,114 310 11,276 545
Thermo Electron Corp + 548 25,962 434 20,561 779
Thiokol Inc 216 5,589 -- -- 295
Tidewater Inc 565 11,088 450 8,831 825
Tiffany & Co 163 5,135 -- -- 240
<CAPTION>
LIFEPATH 2020 LIFEPATH 2030 LIFEPATH 2040
------------- --------------------------- ---------------------------
SECURITY NAME VALUE SHARES VALUE SHARES VALUE
<S> <C> <C> <C> <C> <C>
SouthTrust Corp $ 25,513 887 $ 18,294 835 $ 17,222
Southwestern Public Service Co 17,970 462 13,456 415 12,087
St Joe Paper Co -- -- -- 100 5,975
Standard Federal Bank -- -- -- 300 8,925
Standard Register Co 7,533 312 5,441 -- --
Stanhome Inc 8,372 214 5,992 210 5,880
Staples Inc + 21,704 640 15,520 592 14,356
Star Banc Corp -- -- -- 300 12,788
Starbucks Corp + -- -- -- 400 9,550
State Street Boston Corp 37,772 850 27,094 490 15,619
Sterling Chemicals Inc + 9,551 624 7,020 -- --
Stewart & Stevenson Services 16,335 365 12,045 345 11,385
Stop & Shop Co Inc + -- -- -- 400 9,700
Storage Technology Corp + 14,399 482 10,484 460 10,005
Stratacom Inc + -- -- -- 200 7,400
Strattec Security Corp + 918 50 632 83 1,056
Stratus Computer Inc + 9,653 271 7,148 250 6,594
Structural Dynamics Research + 3,201 319 2,353 -- --
Stryker Corp 31,929 544 23,664 500 21,750
Student Loan Marketing Association -- -- -- 600 22,125
Sunamerica Inc -- -- -- 300 12,300
Sunbeam-Oster Co Inc -- -- -- 400 9,750
Sundstrand Corp 22,646 365 16,699 345 15,784
Sungard Data Systems Inc + -- -- -- 200 8,250
Superior Industries International Inc 12,372 331 9,020 310 8,448
Surgical Care Affiliates + 12,558 428 8,988 -- --
Sybase Inc + -- -- -- 400 16,300
Sybron International Corp + -- -- -- 300 10,725
Symantec Corp + 10,586 361 7,130 -- --
Symbol Technologies Inc + 10,189 270 7,054 250 6,531
Synovus Financial Corp -- -- -- 600 11,850
T Rowe Price Associates -- -- -- 300 9,600
Tambrands Inc 23,961 409 17,689 385 16,651
TCA Cable TV Inc 9,692 276 7,211 -- --
TECO Energy Inc 38,464 1,284 27,606 1,220 26,230
Tecumseh Products Co Class A 16,129 249 11,641 231 10,799
Teleflex Inc 9,430 194 7,202 -- --
Telephone & Data Systems Inc 37,732 587 26,782 565 25,778
Tellabs Inc + -- -- -- 300 15,600
Teradyne Inc + 19,824 400 14,550 375 13,641
Thermo Electron Corp + 36,905 563 26,672 328 15,539
Thiokol Inc 7,633 210 5,434 -- --
Tidewater Inc 16,191 585 11,481 565 11,088
Tiffany & Co 7,560 180 5,670 -- --
</TABLE>
66 67
<PAGE> 189
MASTER INVESTMENT PORTFOLIO--LIFEPATH MASTER SERIES
FEBRUARY 28, 1995
Portfolios of Investments
<TABLE>
<CAPTION>
LIFEPATH 2000 LIFEPATH 2010 LIFEPATH 2020
---------------------------- ---------------------------- -------------
SECURITY NAME SHARES VALUE SHARES VALUE SHARES
<S> <C> <C> <C> <C> <C>
COMMON STOCKS (CONTINUED)
TIG Holdings Inc -- $ -- $ -- $ -- $ --
Tootsie Roll Industries -- -- -- -- --
Topps Co Inc + 512 3,136 -- -- 722
Tosco Corp 357 10,308 280 8,085 489
Transatlantic Holdings Inc 251 14,433 200 11,500 355
Trinity Industries Inc 422 14,032 340 11,305 605
Triton Energy Corp + -- -- -- -- --
Turner Broadcasting System Inc Class A -- -- -- -- --
Turner Broadcasting System Inc Class B -- -- 800 15,100 --
Tyson Foods Inc Class A 1,594 39,252 1,260 31,028 2,274
U.S. Shoe Corp 502 9,538 390 7,410 712
UAL Corp + -- -- -- -- --
UJB Financial Corp 603 17,035 470 13,278 839
Ultramar Corp -- -- -- -- --
Unifi Inc 768 21,696 600 16,950 1,082
Union Texas Petroleum Holdings Inc -- -- -- -- --
United Asset Management Corp -- -- -- -- --
Unitrin Inc -- -- 300 14,700 --
Universal Corp 381 7,572 300 5,963 539
Universal Foods Corp 279 8,754 220 6,903 409
USG Corp + -- -- -- -- --
Utilicorp United Inc 491 14,178 380 10,973 675
Valero Energy Corp 480 8,580 370 6,614 664
Valspar Corp -- -- -- -- --
Value Health Inc + 435 16,204 345 12,851 619
Vanguard Cellular Systems Class A + 411 10,686 330 8,580 595
Varco International Inc + 292 1,862 -- -- 524
Varian Associates Inc 377 13,808 290 10,621 535
VeriFone Inc + 258 6,579 -- -- 363
Viking Office Products Inc + -- -- -- -- --
Vishay Intertechnology Inc + -- -- -- -- --
Vons Co Inc + 480 9,540 370 7,354 664
Vornado Realty Trust -- -- -- -- --
Vulcan Materials Co -- -- 300 15,975 --
Waban Inc + 365 7,209 -- -- 497
Wallace Computer Services Inc 245 7,626 -- -- 350
Washington Federal Inc -- -- -- -- --
Washington Gas & Light Co 232 8,845 180 6,863 312
Washington Mutual Inc -- -- -- -- --
Washington Post Co Class B 127 32,163 100 25,325 180
Watts Industries Inc Class A 308 7,315 -- -- 464
Wausau Paper Mills Co 314 6,908 253 5,566 458
<CAPTION>
LIFEPATH 2020 LIFEPATH 2030 LIFEPATH 2040
------------- --------------------------- ---------------------------
SECURITY NAME VALUE SHARES VALUE SHARES VALUE
<S> <C> <C> <C> <C> <C>
TIG Holdings Inc $ -- -- -- 600 12,450
Tootsie Roll Industries -- -- -- 100 6,700
Topps Co Inc + 4,422 527 3,228 -- --
Tosco Corp 14,120 359 10,366 345 9,962
Transatlantic Holdings Inc 20,413 260 14,950 240 13,800
Trinity Industries Inc 20,116 435 14,464 405 13,466
Triton Energy Corp + -- -- -- 300 9,338
Turner Broadcasting System Inc Class A -- -- -- 600 11,250
Turner Broadcasting System Inc Class B -- -- -- 1,100 20,763
Tyson Foods Inc Class A 55,997 1,649 40,607 1,030 25,364
U.S. Shoe Corp 13,528 507 9,633 480 9,120
UAL Corp + -- -- -- 100 9,475
UJB Financial Corp 23,702 614 17,346 579 16,357
Ultramar Corp -- -- -- 300 7,725
Unifi Inc 30,567 782 22,092 740 20,905
Union Texas Petroleum Holdings Inc -- -- -- 500 9,625
United Asset Management Corp -- -- -- 200 7,425
Unitrin Inc -- -- -- 300 14,700
Universal Corp 10,713 394 7,831 365 7,254
Universal Foods Corp 12,832 289 9,067 270 8,471
USG Corp + -- -- -- 300 7,200
Utilicorp United Inc 19,491 494 14,264 472 13,629
Valero Energy Corp 11,869 484 8,652 460 8,223
Valspar Corp -- -- -- 200 7,150
Value Health Inc + 23,058 447 16,651 419 15,608
Vanguard Cellular Systems Class A + 15,470 427 11,102 390 10,140
Varco International Inc + 3,341 374 2,384 -- --
Varian Associates Inc 19,594 390 14,284 365 13,368
VeriFone Inc + 9,257 268 6,834 -- --
Viking Office Products Inc + -- -- -- 400 12,000
Vishay Intertechnology Inc + -- -- -- 200 10,800
Vons Co Inc + 13,197 484 9,620 460 9,143
Vornado Realty Trust -- -- -- 200 6,850
Vulcan Materials Co -- -- -- 400 21,300
Waban Inc + 9,816 367 7,248 -- --
Wallace Computer Services Inc 10,894 255 7,937 -- --
Washington Federal Inc -- -- -- 400 8,000
Washington Gas & Light Co 11,895 227 8,654 220 8,388
Washington Mutual Inc -- -- -- 600 12,075
Washington Post Co Class B 45,585 133 33,682 25 6,331
Watts Industries Inc Class A 11,020 334 7,933 -- --
Wausau Paper Mills Co 10,076 326 7,172 297 6,534
</TABLE>
68 69
<PAGE> 190
MASTER INVESTMENT PORTFOLIO--LIFEPATH MASTER SERIES
FEBRUARY 28, 1995
Portfolios of Investments
<TABLE>
<CAPTION>
LIFEPATH 2000 LIFEPATH 2010 LIFEPATH 2020
---------------------------- ---------------------------- -------------
SECURITY NAME SHARES VALUE SHARES VALUE SHARES
<S> <C> <C> <C> <C> <C>
COMMON STOCKS (CONTINUED)
Weingarten Realty Investors -- $ -- -- $ -- --
Wellman Inc 363 9,801 280 7,560 495
West One Bancorp 381 10,406 300 8,194 539
Western Digital Corp + -- -- -- -- --
Western Publishing Group Inc + 234 2,223 -- -- 313
Wheelabrator Technologies Inc -- -- -- -- --
Willamette Industries Inc 607 32,626 470 25,263 843
Williams-Sonoma Inc + -- -- -- -- --
Wilmingtion Trust Corp 392 9,702 310 7,673 549
Wisconsin Energy Corp 1,148 31,857 920 25,530 1,645
Witco Corp 616 17,633 480 13,740 852
WPL Holdings Inc 341 10,273 260 7,833 473
Xilinx Inc + 249 16,652 200 13,375 353
XOMA Corp + 188 388 -- -- 193
Xtra Corp -- -- -- -- --
York International Corp 402 15,477 320 12,320 559
------------- -------------
MEDIUM CAPITALIZATION STOCKS - VALUE $ 4,652,964 $ 4,230,836
- COST $ 4,437,876 $ 4,150,051
INTERNATIONAL STOCKS
Percent of Net Assets 3.6% 6.8%
Alcatel Alsthom Compagnie Generale d'Electricite
(FR) 4,700 $ 76,375 6,800 $ 110,500 9,000
Allied Irish Banks PLC ADR (IRL) 600 15,750 800 21,000 1,100
Banco Bilbao Vizcaya ADR (SPN) 400 10,700 500 13,375 700
Banco Central Hispanoamericano SA ADR (SPN) 400 4,550 700 7,963 900
Banco Santander SA ADR (SPN) 300 10,763 400 14,350 600
Barclays PLC ADR (UK) 1,100 42,488 1,700 65,663 2,200
BAT Industries PLC ADR (UK) 3,900 51,675 5,700 75,525 7,600
Benetton Group SpA ADR (ITLY) 2,200 42,350 3,100 59,675 4,200
BET PLC ADR (UK) 2,700 17,888 3,900 25,838 5,200
British Airways PLC ADR (UK) 600 37,200 900 55,800 1,200
British Gas PLC ADR (UK) 1,500 69,000 2,100 96,600 2,800
British Petroleum Co PLC ADR (UK) 500 38,250 700 53,550 900
British Steel PLC ADR (UK) 300 7,613 500 12,688 700
British Telecommunications PLC ADR (UK) 1,500 89,625 2,100 125,475 2,800
Broken Hill Proprietory Co Ltd ADR (AUSL) 800 44,000 1,200 66,000 1,400
Coles Myer Ltd ADR (AUSL) 900 23,850 1,400 37,100 1,700
Courtaulds PLC ADR (UK) 8,000 55,000 11,600 79,750 15,400
<CAPTION>
LIFEPATH 2020 LIFEPATH 2030 LIFEPATH 2040
------------- --------------------------- ---------------------------
SECURITY NAME VALUE SHARES VALUE SHARES VALUE
<S> <C> <C> <C> <C> <C>
Weingarten Realty Investors $ -- -- $ -- 200 $ 7,250
Wellman Inc 13,365 365 9,855 345 9,315
West One Bancorp 14,721 394 10,761 365 9,969
Western Digital Corp + -- -- -- 500 7,500
Western Publishing Group Inc + 2,974 233 2,214 -- --
Wheelabrator Technologies Inc -- -- -- 700 9,625
Willamette Industries Inc 45,311 618 33,218 385 20,694
Williams-Sonoma Inc + -- -- -- 200 4,250
Wilmingtion Trust Corp 13,588 404 9,999 375 9,281
Wisconsin Energy Corp 45,649 1,175 32,606 1,105 30,664
Witco Corp 24,389 622 17,805 595 17,032
WPL Holdings Inc 14,249 343 10,333 325 9,791
Xilinx Inc + 23,607 258 17,254 240 16,050
XOMA Corp + 398 193 398 -- --
Xtra Corp -- -- -- 200 10,050
York International Corp 21,522 414 15,939 385 14,823
------------ ------------ ------------
MEDIUM CAPITALIZATION STOCKS - VALUE $ 7,046,079 $ 4,913,624 $ 6,171,970
- COST $ 6,733,621 $ 4,615,780 $ 5,925,943
INTERNATIONAL STOCKS
Percent of Net Assets 5.8% 5.5% 5.0%
Alcatel Alsthom Compagnie Generale d'Electricite
(FR) $ 146,250 4,700 76,375 5,200 84,500
Allied Irish Banks PLC ADR (IRL) 28,875 600 15,750 600 15,750
Banco Bilbao Vizcaya ADR (SPN) 18,725 400 10,700 400 10,700
Banco Central Hispanoamericano SA ADR (SPN) 10,238 400 4,550 500 5,688
Banco Santander SA ADR (SPN) 21,525 300 10,763 300 10,763
Barclays PLC ADR (UK) 84,975 1,100 42,488 1,300 50,213
BAT Industries PLC ADR (UK) 100,700 3,900 51,675 4,400 58,300
Benetton Group SpA ADR (ITLY) 80,850 2,200 42,350 2,400 46,200
BET PLC ADR (UK) 34,450 2,700 17,888 3,000 19,875
British Airways PLC ADR (UK) 74,400 600 37,200 700 43,400
British Gas PLC ADR (UK) 128,800 1,500 69,000 1,600 73,600
British Petroleum Co PLC ADR (UK) 68,850 500 38,250 500 38,250
British Steel PLC ADR (UK) 17,763 300 7,613 400 10,150
British Telecommunications PLC ADR (UK) 167,300 1,500 89,625 1,600 95,600
Broken Hill Proprietory Co Ltd ADR (AUSL) 77,000 800 44,000 900 49,500
Coles Myer Ltd ADR (AUSL) 45,050 900 23,850 1,000 26,500
Courtaulds PLC ADR (UK) 105,875 8,000 55,000 8,900 61,188
</TABLE>
70 71
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FEBRUARY 28, 1995
Portfolios of Investments
<TABLE>
<CAPTION>
LIFEPATH 2000 LIFEPATH 2010 LIFEPATH 2020
---------------------------- ---------------------------- -------------
SECURITY NAME SHARES VALUE SHARES VALUE SHARES
<S> <C> <C> <C> <C> <C>
COMMON STOCKS (CONTINUED)
Daimler Benz Aktiengesellschaft ADR (GER) 7,100 $ 344,350 10,200 $ 494,700 13,600
ELF Aquitaine ADR (FR) 3,900 139,913 5,600 200,900 7,500
Fiat SpA ADR (ITLY) + 3,200 61,200 4,600 87,975 6,100
Glaxo Holdings PLC ADR (UK) 3,000 60,375 4,400 88,550 5,800
Grand Metropolitan PLC ADR (UK) 3,100 75,950 4,500 110,250 5,900
Hafslund Nycomed Class B ADR (NOR) 1,100 21,863 1,600 31,800 1,700
Hanson PLC ADR (UK) 3,500 65,625 5,100 95,625 6,700
Hong Kong Telecommunications Ltd ADR (HK) 8,800 160,600 12,800 233,600 16,900
Imperial Chemical Industries PLC ADR (UK) 900 40,163 1,200 53,550 1,400
KLM Royal Dutch Airlines ADR (NETH) + 300 8,775 400 11,700 500
Montedison SpA ADR (ITLY) + 1,400 10,150 2,100 15,225 2,200
National Australia Bank Ltd ADS (AUSL) 800 32,200 1,200 48,300 1,600
News Corporation Ltd ADR (AUSL) 600 10,875 900 16,313 1,100
Novo-Nordisk A/S ADR (DEN) 1,700 42,713 2,400 60,300 2,700
Philips Electronics NV (NETH) 800 26,300 1,100 36,163 1,500
Repsol SA ADR (SPN) 800 22,900 1,100 31,488 1,400
Rhone-Poulenc SA ADR (FR) 1,800 42,975 2,600 62,075 3,400
Royal Dutch Petroleum Co ADR (NETH) 1,339 150,135 2,917 327,069 6,638
RTZ PLC ADR (UK) 1,100 52,113 1,600 75,800 2,200
Smithkline Beecham PLC ADR (UK) 800 31,100 1,200 46,650 1,600
Telecommunications of New Zealand Corp ADR (NZ) 400 22,150 500 27,688 700
Telefonica de Espana ADR (SPN) 1,000 37,500 1,400 52,500 1,700
Total Compagnie Francaise des Petroles SA ADR (FR) 1,600 44,400 2,300 63,825 3,100
Unilever NV (NETH) 305 37,058 783 95,135 1,871
Vodafone Group PLC ADR (UK) 800 24,400 1,100 33,550 1,500
Western Mining Holdings Corp Ltd ADR (AUSL) 700 14,875 1,000 21,250 1,200
Westpac Banking Corp ADR (AUSL) 700 12,864 1,100 20,213 1,400
------------- -------------
INTERNATIONAL STOCKS - VALUE $ 2,230,599 $ 3,363,046
- COST $ 2,245,434 $ 3,378,977
TOTAL COMMON STOCKS - VALUE $12,498,666 $23,026,064
- COST $12,149,672 $22,314,022
<CAPTION>
LIFEPATH 2020 LIFEPATH 2030 LIFEPATH 2040
------------- --------------------------- ---------------------------
SECURITY NAME VALUE SHARES VALUE SHARES VALUE
<S> <C> <C> <C> <C> <C>
Daimler Benz Aktiengesellschaft ADR (GER) $ 659,600 7,100 344,350 7,800 378,300
ELF Aquitaine ADR (FR) 269,063 3,900 139,913 4,300 154,263
Fiat SpA ADR (ITLY) + 116,663 3,200 61,200 3,500 66,938
Glaxo Holdings PLC ADR (UK) 116,725 3,000 60,375 3,300 66,413
Grand Metropolitan PLC ADR (UK) 144,550 3,100 75,950 3,400 83,300
Hafslund Nycomed Class B ADR (NOR) 33,788 1,100 21,863 1,200 23,850
Hanson PLC ADR (UK) 125,625 3,500 65,625 3,900 73,125
Hong Kong Telecommunications Ltd ADR (HK) 308,425 8,800 160,600 9,700 177,025
Imperial Chemical Industries PLC ADR (UK) 62,475 900 40,163 900 40,163
KLM Royal Dutch Airlines ADR (NETH) + 14,625 300 8,775 300 8,775
Montedison SpA ADR (ITLY) + 15,950 1,400 10,150 1,700 12,325
National Australia Bank Ltd ADS (AUSL) 64,400 800 32,200 900 36,225
News Corporation Ltd ADR (AUSL) 19,938 600 10,875 700 12,688
Novo-Nordisk A/S ADR (DEN) 67,838 1,700 42,713 1,900 47,738
Philips Electronics NV (NETH) 49,313 800 26,300 900 29,588
Repsol SA ADR (SPN) 40,075 800 22,900 800 22,900
Rhone-Poulenc SA ADR (FR) 81,175 1,800 42,975 2,000 47,750
Royal Dutch Petroleum Co ADR (NETH) 744,286 5,150 577,444 6,903 773,999
RTZ PLC ADR (UK) 104,225 1,100 52,113 1,200 56,850
Smithkline Beecham PLC ADR (UK) 62,200 800 31,100 900 34,988
Telecommunications of New Zealand Corp ADR (NZ) 38,763 400 22,150 400 22,150
Telefonica de Espana ADR (SPN) 63,750 1,000 37,500 1,100 41,250
Total Compagnie Francaise des Petroles SA ADR (FR) 86,025 1,600 44,400 1,800 49,950
Unilever NV (NETH) 227,327 1,315 159,773 2,482 301,563
Vodafone Group PLC ADR (UK) 45,750 800 24,400 800 24,400
Western Mining Holdings Corp Ltd ADR (AUSL) 25,500 700 14,875 800 17,000
Westpac Banking Corp ADR (AUSL) 25,725 700 12,863 800 14,700
------------ ------------ ------------
INTERNATIONAL STOCKS - VALUE $ 4,825,405 $ 2,780,622 $ 3,318,393
- COST $ 4,826,436 $ 2,769,544 $ 3,293,357
TOTAL COMMON STOCKS - VALUE $50,748,594 $37,375,573 $58,568,852
- COST $48,542,102 $35,508,346 $55,544,061
</TABLE>
72 73
<PAGE> 192
MASTER INVESTMENT PORTFOLIO--LIFEPATH MASTER SERIES
FEBRUARY 28, 1995
Portfolios of Investments
<TABLE>
<CAPTION>
LIFEPATH 2000 LIFEPATH 2010 LIFEPATH 2020
---------------------------- ---------------------------- -------------
<S> <C> <C> <C> <C> <C>
SECURITY NAME PAR VALUE PAR VALUE PAR
U.S. TREASURY BONDS
Percent of Net Assets 2.2% 6.5%
U.S. Treasury Bonds, 6.25% - 11.75%, 11/15/04 -
08/15/23 1,100,000 $ 1,349,530 2,900,000 $ 3,220,529 9,000,000
TOTAL U.S. TREASURY BONDS - COST $ 1,275,270 $ 3,088,850
U.S. TREASURY NOTES
Percent of Net Assets 63.3% 45.4%
U.S. Treasury Notes, 4.38% - 9.13%, 03/31/96 -
05/15/04 39,650,000 $ 39,040,315 22,300,000 $ 22,429,801 20,180,000
TOTAL U.S. TREASURY NOTES - COST $ 39,459,577 $ 22,726,056
U.S. TREASURY BILLS
Percent of Net Assets 11.9% 3.3%
U.S. Treasury Bills, 4.86% - 5.87% YTM, 03/09/95 -
05/25/95 7,378,000 $ 7,314,809* 1,668,000 $ 1,650,327* 2,484,000
TOTAL U.S. TREASURY BILLS - COST $ 7,313,890 $ 1,650,310
------------- -------------
TOTAL INVESTMENTS - VALUE $60,203,320 $50,326,721
(Notes 1 and 3) - COST** $60,198,409 $49,779,238
<CAPTION>
LIFEPATH 2020 LIFEPATH 2030 LIFEPATH 2040
------------- --------------------------- ---------------------------
SECURITY NAME VALUE SHARES VALUE SHARES VALUE
<S> <C> <C> <C> <C> <C>
U.S. TREASURY BONDS
Percent of Net Assets 11.7% 19.3% 11.1%
U.S. Treasury Bonds, 6.25% - 11.75%, 11/15/04 -
08/15/23 $ 9,581,372 8,930,000 $ 9,747,497 7,100,000 $ 7,363,058
TOTAL U.S. TREASURY BONDS - COST $ 9,251,282 $ 9,647,428 $ 7,224,052
U.S. TREASURY NOTES
Percent of Net Assets 24.4% 4.4% 0.4%
U.S. Treasury Notes, 4.38% - 9.13%, 03/31/96 -
05/15/04 $ 20,040,906 2,200,000 $ 2,224,563 300,000 $ 311,250
TOTAL U.S. TREASURY NOTES - COST $ 20,224,697 $ 2,133,744 $ 300,844
U.S. TREASURY BILLS
Percent of Net Assets 3.0% 2.2% 2.4%
U.S. Treasury Bills, 4.86% - 5.87% YTM, 03/09/95
- - 05/25/95 $ 2,451,366 1,142,000 $ 1,128,744 1,610,000 $ 1,589,559
TOTAL U.S. TREASURY BILLS - COST $ 2,451,435 $ 1,128,738 $ 1,589,706
------------ ------------ ------------
TOTAL INVESTMENTS - VALUE $82,822,238 $50,476,377 $67,832,719
(Notes 1 and 3) - COST** $80,469,516 $48,418,256 $64,658,663
</TABLE>
74 75
<PAGE> 193
MASTER INVESTMENT PORTFOLIO--LIFEPATH MASTER SERIES
FEBRUARY 28, 1995
Portfolios of Investments
<TABLE>
<CAPTION>
LifePath 2000 LifePath 2010 Lifepath 2020
------------------------ ------------------------ ----------------
Percent Value Percent Value Percent
<S> <C> <C> <C> <C>
TOTAL INVESTMENTS IN SECURITIES 97.7% $60,203,320 101.7% $50,326,721 100.7%
Other Assets and Liabilities,
Net 2.3% 1,430,901 (1.7)% (842,387) (0.7)%
------------ ---------- ------------ ---------- ------
TOTAL NET ASSETS 100.0% $61,634,221 100.0% $49,484,334 100.0%
------------ ---------- ------------ ---------- ------
------------ ---------- ------------ ---------- ------
<CAPTION>
LIFEPATH 2020 LIFEPATH 2030 LIFEPATH 2040
------------- --------------------------- ---------------------------
SECURITY NAME VALUE SHARES VALUE SHARES VALUE
<S> <C> <C> <C> <C> <C>
TOTAL INVESTMENTS IN SECURITIES $82,822,238 99.7% $50,476,377 101.9% $67,832,719
Other Assets and Liabilities,
Net (579,462) 0.3% 158,096 (1.9)% (1,273,197)
----------- ---------- ----------- ---------- -----------
TOTAL NET ASSETS $82,242,776 100.0% $50,634,473 100.0% $66,559,522
----------- ---------- ----------- ---------- -----------
- ----------------------------------------------------------------------------------------------------------------------------
</TABLE>
+NON-INCOME EARNING SECURITIES.
*CERTAIN U.S. TREASURY BILLS ARE HELD IN A SEGREGATED ACCOUNT FOR MARGIN
REQUIREMENTS ON FUTURES CONTRACTS. SEE NOTE 1.
**COST FOR FEDERAL INCOME TAX PURPOSES IS THE SAME FOR FINANCIAL STATEMENT
PURPOSES AND NET UNREALIZED APPRECIATION CONSISTS OF:
<TABLE>
<S> <C> <C> <C> <C> <C>
Gross Unrealized Appreciation $ 883,578 $1,442,712
Gross Unrealized Depreciation (878,667) (895,229)
---------- -----------
Net Unrealized Appreciation $ 4,911 $ 547,483
Gross Unrealized Appreciation $3,842,727 $3,026,343 $4,556,908
Gross Unrealized Depreciation (1,490,005) (968,222) (1,382,852)
---------- ---------- ----------
Net Unrealized Appreciation $2,352,722 $2,058,121 $3,174,056
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
76 77
<PAGE> 194
STATEMENT OF ASSETS AND LIABILITIES
February 28, 1995
<TABLE>
<CAPTION>
LIFEPATH LIFEPATH LIFEPATH
2000 2010 2020
MASTER SERIES MASTER SERIES MASTER SERIES
- ----------------------------------------------------------------------------------
<S> <C> <C> <C>
ASSETS
Investments:
In securities, at market
value (see cost below)
(Note 1) $60,203,320 $50,326,721 $82,822,238
Cash 338 3,102 11,277
Receivables:
Dividends and interest 644,370 408,045 558,217
Beneficial interests sold 1,336,688 152,250 309,890
Investment securities sold 2,092,933 2,994,860 2,994,765
Variation margin on
futures contracts 5,400 3,600 0
Total Assets 64,283,049 53,888,578 86,696,387
LIABILITIES
Payables:
Investment securities
purchased 2,061,303 3,982,119 3,893,611
Allocations to beneficial
interest holders 533,402 358,616 491,506
Beneficial interests
redeemed 0 0 0
Due to adviser 54,123 63,509 68,494
Total Liabilities 2,648,828 4,404,244 4,453,611
TOTAL NET ASSETS $61,634,221 $49,484,334 $82,242,776
INVESTMENTS AT COST $60,198,409 $49,779,238 $80,469,516
</TABLE>
- ---------------------------------------------------------------------
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
78
<PAGE> 195
STATEMENT OF ASSETS AND LIABILITIES 2/28/95
<TABLE>
<CAPTION>
LIFEPATH LIFEPATH
2030 2040
MASTER SERIES MASTER SERIES
- -----------------------------------------------------------------------------------------
<S> <C> <C>
ASSETS
Investments:
In securities, at market
value (see cost below)
(Note 1) $50,476,377 $67,832,719
Cash 1,348 4,160
Receivables:
Dividends and interest 243,281 270,471
Beneficial interests sold 190,691 163,034
Investment securities sold 2,097,117 1,301,249
Variation margin on
futures contracts 0 0
Total Assets 53,008,814 69,571,633
LIABILITIES
Payables:
Investment securities
purchased 2,063,997 2,262,786
Allocations to beneficial
interest holders 268,421 274,173
Beneficial interests
redeemed 0 420,063
Due to adviser 41,923 55,089
Total Liabilities 2,374,341 3,012,111
TOTAL NET ASSETS $50,634,473 $66,559,522
INVESTMENTS AT COST $48,418,256 $64,658,663
</TABLE>
- ---------------------------------------------------------------------
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
79
<PAGE> 196
STATEMENT OF OPERATIONS
For The Year Ended February 28, 1995
<TABLE>
<CAPTION>
LIFEPATH LIFEPATH LIFEPATH
2000 2010 2020
MASTER SERIES MASTER SERIES MASTER SERIES
- ----------------------------------------------------------------------------------
<S> <C> <C> <C>
INVESTMENT INCOME
Dividends $172,305 $234,457 $630,985
Interest 2,157,823 1,391,512 1,612,077
Total Investment Income 2,330,128 1,625,969 2,243,062
EXPENSES (Note 2)
Advisory fees 217,676 158,218 252,413
Total Expenses 217,676 158,218 252,413
NET INVESTMENT INCOME 2,112,452 1,467,751 1,990,649
REALIZED AND UNREALIZED GAIN
(LOSS) ON INVESTMENTS
Net realized gain (loss) on
sale of investments 118,927 2,805 52,734
Net realized gain (loss) on
sale of futures contracts 48,130 295,721 (21,107)
Net change in unrealized
appreciation of
investments 4,911 547,483 2,352,722
Net change in unrealized
appreciation of futures
contracts 15,075 10,050 0
Net Gain On Investments 187,043 856,059 2,384,349
NET INCREASE IN NET ASSETS
RESULTING FROM OPERATIONS $2,299,495 $2,323,810 $4,374,998
</TABLE>
- ---------------------------------------------------------------------
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
80
<PAGE> 197
STATEMENT OF OPERATIONS 2/28/95
<TABLE>
<CAPTION>
LIFEPATH LIFEPATH
2030 2040
MASTER SERIES MASTER SERIES
- -----------------------------------------------------------------
<S> <C> <C>
INVESTMENT INCOME
Dividends $482,604 $772,325
Interest 822,581 456,762
Total Investment Income 1,305,185 1,229,087
EXPENSES (Note 2)
Advisory fees 156,397 189,121
Total Expenses 156,397 189,121
NET INVESTMENT INCOME 1,148,788 1,039,966
REALIZED AND UNREALIZED GAIN
(LOSS) ON INVESTMENTS
Net realized gain (loss) on
sale of investments (144,351) 140,585
Net realized gain (loss) on
sale of futures contracts (38,856) (102,175)
Net change in unrealized
appreciation of
investments 2,058,121 3,174,056
Net change in unrealized
appreciation of futures
contracts 0 0
Net Gain On Investments 1,874,914 3,212,466
NET INCREASE IN NET ASSETS
RESULTING FROM OPERATIONS $3,023,702 $4,252,432
</TABLE>
- ---------------------------------------------------------------------
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
81
<PAGE> 198
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
LIFEPATH 2000 LIFEPATH 2010
MASTER SERIES MASTER SERIES
---------------- ----------------
FOR THE FOR THE
YEAR ENDED YEAR ENDED
FEBRUARY 28, FEBRUARY 28,
1995 1995
- ------------------------------------------------------------------------------------------
<S> <C> <C>
INCREASE IN NET ASSETS
Operations:
Net investment income $2,112,452 $1,467,751
Net realized gain (loss) on sale of investments 118,927 2,805
Net realized gain (loss) on sale of futures
contracts 48,130 295,721
Net change in unrealized appreciation of investments 4,911 547,483
Net change in unrealized appreciation of futures
contracts 15,075 10,050
Net increase in net assets resulting from operations 2,299,495 2,323,810
Net increase in net assets resulting from beneficial
interests transactions 59,314,726 47,140,524
Increase In Net Assets 61,614,221 49,464,334
NET ASSETS:
Beginning net assets $20,000 $20,000
Ending net assets $61,634,221 $49,484,334
- ------------------------------------------------------------------------------------------
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
82
<PAGE> 199
STATEMENT OF CHANGES IN NET ASSETS 2/28/95
<TABLE>
<CAPTION>
LIFEPATH 2020 LIFEPATH 2030 LIFEPATH 2040
MASTER SERIES MASTER SERIES MASTER SERIES
------------- ------------- -------------
FOR THE FOR THE FOR THE
YEAR ENDED YEAR ENDED YEAR ENDED
FEBRUARY 28, FEBRUARY 28, FEBRUARY 28,
1995 1995 1995
- ------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
INCREASE IN NET ASSETS
Operations:
Net investment income $1,990,649 $1,148,788 $1,039,966
Net realized gain (loss) on sale of investments 52,734 (144,351) 140,585
Net realized gain (loss) on sale of futures
contracts (21,107) (38,856) (102,175)
Net change in unrealized appreciation of investments 2,352,722 2,058,121 3,174,056
Net change in unrealized appreciation of futures
contracts 0 0 0
Net increase in net assets resulting from operations 4,374,998 3,023,702 4,252,432
Net increase in net assets resulting from beneficial
interests transactions 77,847,778 47,590,771 62,287,090
Increase In Net Assets 82,222,776 50,614,473 66,539,522
NET ASSETS:
Beginning net assets $20,000 $20,000 $20,000
Ending net assets $82,242,776 $50,634,473 $66,559,522
- --------------------------------------------------------------------------
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
83
<PAGE> 200
MASTER INVESTMENT PORTFOLIO
NOTES TO THE FINANCIAL STATEMENTS
1. SIGNIFICANT ACCOUNTING POLICIES
ORGANIZATION. Master Investment Portfolio ("Master Portfolio") is
registered under the Investment Company Act of 1940, as amended, as an open-end
management investment company. Master Portfolio was organized as a Delaware
business trust pursuant to an Agreement and Declaration of Trust dated May 14,
1993 and had no operations prior to March 1, 1994. Master Portfolio is currently
authorized to issue fourteen separate diversified portfolios (the "Master
Series"), of which the following have commenced operations: LifePath 2000 Master
Series, LifePath 2010 Master Series, LifePath 2020 Master Series, LifePath 2030
Master Series, LifePath 2040 Master Series, Asset Allocation Master Series, Bond
Index Master Series, S&P 500 Index Master Series and U.S. Treasury Allocation
Master Series. The following significant accounting policies are consistently
followed by Master Portfolio in the preparation of its financial statements, and
such policies are in conformity with generally accepted accounting principles
for investment companies. The financial statements for the Asset Allocation
Master Series, Bond Index Master Series, S&P 500 Index Master Series and U.S.
Treasury Allocation Master Series are presented separately.
INVESTMENT POLICY AND SECURITY VALUATION
Each Master Series follows an asset allocation strategy among three broad
investment classes: equity and debt securities of issuers located throughout the
world and cash in the form of money market instruments. The securities of the
Master Series are valued at the last sale price on the primary securities
exchange or national securities market on which such securities are traded.
Securities not listed on an exchange or national securities market, or
securities in which there were no transactions, are valued at the most recent
bid prices. Debt securities maturing in 60 days or less are valued at amortized
cost, which approximates market value. Debt securities, other than those
maturing in 60 days or less, are valued at the latest quoted bid price. Any
securities, restricted securities or other assets for which recent market
quotations are not readily available, are valued at fair value as determined in
good faith in accordance with policies approved by the Master Portfolio's Board
of Trustees.
84
<PAGE> 201
MASTER INVESTMENT PORTFOLIO
NOTES TO THE FINANCIAL STATEMENTS
SECURITY TRANSACTIONS AND REVENUE RECOGNITION
Securities transactions are accounted for on the date the securities are
purchased or sold (trade date). Dividend income is recognized on the ex-dividend
date, and interest income is recognized on a daily accrual basis. Realized gains
or losses are reported on the basis of identified cost of securities delivered.
Bond discounts and premiums are amortized as required by the Internal Revenue
Code (the "Code").
FEDERAL INCOME TAXES
Each Master Series of the Trust intends to qualify as a partnership for
federal income tax purposes. Each Master Series therefore believes that it will
not be subject to any federal income tax on its income and net capital gains (if
any). However, each investor in a Master Series will be taxable on its allocable
share of the partnership's income and capital gains for purposes of determining
its federal income tax liability. The determination of such share will be made
in accordance with the applicable sections of the Code.
It is intended that each Master Series' assets, income and allocations will
be managed in such a way that a regulated investment company investing in a
Master Series will be able to satisfy the requirements of Subchapter M of the
Code, assuming that an investment company invested all of its assets in the
respective Master Series.
FUTURES CONTRACTS
The Master Series may purchase futures contracts to gain exposure to market
changes, as this may be more efficient or cost effective than actually buying
the securities. A futures contract is an agreement between two parties to buy
and sell a security at a set price on a future date and is exchange traded. Upon
entering into such a contract, a Master Series is required to pledge to the
broker an amount of cash, U.S. Government securities or other high-quality debt
securities equal to the minimum "initial margin" requirements of the exchange.
Pursuant to the contract, the Master Series agrees to receive from or pay to the
broker an amount of cash equal to the daily fluctuation in the value of the
contract. Such receipts or payments are known as "variation margin" and are
recorded by the Master Series as unrealized gains or losses. When the contract
is closed, the
85
<PAGE> 202
MASTER INVESTMENT PORTFOLIO
NOTES TO THE FINANCIAL STATEMENTS
Master Series records a realized gain or loss equal to the difference between
the value of the contract at the time it was opened and the value at the time it
was closed. Pursuant to regulations and/or published positions of the Securities
and Exchange Commission, the Master Series are required to segregate cash, U.S.
Government obligations or high quality, liquid debt instruments in connection
with futures transactions in an amount generally equal to the entire contract
amount. Risks of entering into futures contracts include the possibility that
there may be an illiquid market and that a change in the value of the contracts
may not correlate with changes in the value of the underlying securities. As of
February 28, 1995, the following Master Series had futures contracts
outstanding:
<TABLE>
<CAPTION>
NOTIONAL NET
NUMBER OF EXPIRATION CONTRACT UNREALIZED
FUND CONTRACTS TYPE DATE VALUE APPRECIATION
- -----------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
LifePath 2000 3 S&P 500 Index March 1995 732,825 15,075
LifePath 2010 2 S&P 500 Index March 1995 488,650 10,050
</TABLE>
The LifePath 2000 Master Series and LifePath 2010 Master Series have pledged
to brokers U.S. Treasury bills for initial margin requirements with a par value
of $35,000 and $25,000, respectively.
2. AGREEMENTS AND OTHER TRANSACTIONS WITH AFFILIATES
The Master Series has entered into an investment advisory agreement on
behalf of the Master Series with Wells Fargo Bank, N.A. ("WFB"). Pursuant to the
agreement, WFB provides investment guidance and policy direction in connection
with the daily portfolio management of each Master Series. WFB has engaged Wells
Fargo Nikko Investment Advisors ("WFNIA") to provide sub-advisory services to
each Master Series. Pursuant to a Sub-Advisory Agreement, WFNIA, subject to the
supervision and approval of WFB, provides investment advisory assistance and the
day-to-day management of each Master Series' assets, subject to the overall
authority of the Master Portfolio's Board of Trustees. For providing these
services, WFNIA will be compensated by WFB. WFB is entitled to be compensated
monthly at an annual rate of 0.55% of the average daily net assets of the Master
Series.
86
<PAGE> 203
MASTER INVESTMENT PORTFOLIO
NOTES TO THE FINANCIAL STATEMENTS
In addition, Wells Fargo Institutional Trust Company N.A. ("WFITC"), a
subsidiary of WFNIA, acts as custodian for these Master Series. Custody fees are
paid to WFITC from the sub-advisory fee paid to WFNIA.
In mid-April 1995, it was announced that Wells Fargo Bank and The Nikko
Securities Co., Ltd., which are the co-owners of WFNIA, had begun considering a
variety of potential transactions which could result in a change of ownership or
control of WFNIA. It is not possible at this time to predict whether any such
transaction will occur or if it does, what structure it would take.
ORGANIZATION EXPENSES
Stephens Inc. ("Stephens"), the administrator, sponsor and distributor for
the Master Series has paid all expenses in connection with the Master Series'
organization and initial registration.
Pursuant to the Administration Agreement, Stephens has agreed to assume all
operating expenses of each LifePath Master Series, except for advisory fees,
interest, brokerage fees and commissions, if any, costs of independent pricing
services and any extraordinary expenses.
Certain officers and directors of the Master Portfolio are also officers of
Stephens. At February 28, 1995, these officers of Stephens collectively owned
less than 1% of the Master Series' outstanding shares of beneficial interest.
87
<PAGE> 204
MASTER INVESTMENT PORTFOLIO
NOTES TO THE FINANCIAL STATEMENTS
3. INVESTMENT PORTFOLIO TRANSACTIONS
Purchases and sales of investments, exclusive of short-term securities, for
each Master Series for the year ended February 28, 1995, are as follows:
<TABLE>
<CAPTION>
LIFEPATH LIFEPATH LIFEPATH LIFEPATH LIFEPATH
AGGREGATE 2000 2010 2020 2030 2040
PURCHASES AND MASTER MASTER MASTER MASTER MASTER
SALES OF: SERIES SERIES SERIES SERIES SERIES
- ----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
U.S. GOVERNMENT
OBLIGATIONS:
Purchases at cost $ 42,306,152 $ 28,661,280 $ 38,299,280 $ 19,911,157 $ 7,524,297
Sales proceeds 1,643,859 2,823,328 8,608,578 7,831,663 0
OTHER SECURITIES:
Purchases at cost 15,763,643 25,357,321 51,544,606 37,705,293 57,108,586
Sales proceeds 3,777,339 3,129,664 3,326,074 2,357,036 1,708,434
- ----------------------------------------------------------------------------------------------------
</TABLE>
4. FINANCIAL HIGHLIGHTS
The portfolio turnover rate, excluding short-term securities, for the Master
Series for the year ended February 28, 1995, are as follows:
<TABLE>
<CAPTION>
LIFEPATH 2000 LIFEPATH 2010 LIFEPATH 2020 LIFEPATH 2030 LIFEPATH 2040
MASTER SERIES MASTER SERIES MASTER SERIES MASTER SERIES MASTER SERIES
<S> <C> <C> <C> <C> <C>
Portfolio Turnover 17% 24% 28% 40% 5%
- ----------------------------------------------------------------------------------------------
</TABLE>
88
<PAGE> 205
REPORT OF INDEPENDENT ACCOUNTANTS
To the Shareholders and Board of Trustees of
Master Investment Portfolio:
We have audited the accompanying statements of assets and liabilities,
including the portfolios of investments, of LifePath 2000 Master Series,
LifePath 2010 Master Series, LifePath 2020 Master Series, LifePath 2030 Master
Series, and LifePath 2040 Master Series (each a series of Master Investment
Portfolio) as of February 28, 1995, and the related statements of operations,
the statements of changes in net assets, and the financial highlights for the
year then ended. These financial statements and financial highlights are the
responsibility of Master Investment Portfolio's management. Our responsibility
is to express an opinion on these financial statements and financial highlights
based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as of
February 28, 1995, by correspondence with the custodian and brokers. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements and financial highlights referred
to above present fairly, in all material respects, the financial position of
LifePath 2000 Master Series, LifePath 2010 Master Series, LifePath 2020 Master
Series, LifePath 2030 Master Series, and LifePath 2040 Master Series as of
February 28, 1995, and the results of their operations, the changes in their net
assets, and their financial highlights for the year then ended, in conformity
with generally accepted accounting principles.
/s/ COOPERS & LYBRAND L.L.P.
SAN FRANCISCO, CALIFORNIA
April 20, 1995
<PAGE> 206
LIST OF ABBREVIATIONS
<TABLE>
<S> <C>
ADR -- American Depository Receipt
AUSL -- Australia
DEN -- Denmark
FR -- France
GER -- Germany
HK -- Hong Kong
IRL -- Ireland
ITLY -- Italy
NETH -- Netherlands
NOR -- Norway
NZ -- New Zealand
SPN -- Spain
UK -- United Kingdom
YTM -- Yield to Maturity
</TABLE>
90
89
<PAGE> 207
STAGECOACH TRUST
File Nos. 33-64352; 811-7780
PART C. OTHER INFORMATION
Item 24. Financial Statements and Exhibits
(a) Financial Statements:
(1) The following audited Financial Statements for the
LifePath Fund's Institutional and Retail Shares are
included in Part B, Item 23:
Statement of Assets and Liabilities -- February 28,
1995
Statement of Operations for the period ended
February 28, 1995
Statement of Changes in Net Assets for the period
ended February 28, 1995
Financial Highlights for the period ended
February 28, 1995
Notes to Financial Statements -- February 28, 1995
(2) The following audited Financial Statements for the
LifePath Master Series are included in Part B, Item 23:
Portfolio of Investments -- February 28, 1995
Statement of Assets and Liabilities -- February 28,
1995
Statement of Operations for the period ended
February 28, 1995
Statement of Changes in Net Assets for the period
ended February 28, 1995
Notes to Financial Statements -- February 28, 1995
(b) Exhibits:
(1)(a) Amended and Restated Agreement and Declaration of Trust,
Incorporated by reference to Pre-Effective Amendment
No. 2 to the Registration Statement filed on January 11,
1994.
C-1
<PAGE> 208
(2)(a) By-Laws, Incorporated by reference to Pre-Effective
Amendment No. 1 to the Registration Statement filed on
November 16, 1993.
(5) Form of Administration Agreement, Incorporated by
reference to Pre-Effective Amendment No. 1 to the
Registration Statement filed on November 16, 1993.
(6)(a) Revised Form of Distribution Agreement, Incorporated by
reference to Post-Effective Amendment No. 1 to the
Registration Statement filed on January 28, 1994.
(6)(b) Form of Retail Shares Distribution Plan, Incorporated by
reference to Post-Effective Amendment No. 1 to the
Registration Statement filed on January 28, 1994.
(8) Form of Custody Agreement, Incorporated by reference to
Pre-Effective Amendment No. 1 to the Registration
Statement filed on November 16, 1993.
(9)(a) Shareholder Services Plan, Incorporated by reference to
Pre-Effective Amendment No. 1 to the Registration
Statement filed on November 16, 1993.
(9)(b) Form of License Agreement, Incorporated by reference to
Pre-Effective Amendment No. 1 to the Registration
Statement filed on November 16, 1993.
(10) Opinion and Consent of Counsel, filed herewith.
(11)(a) Consent of Auditors - KPMG Peat Marwick LLP, filed
herewith.
(b) Consent of Auditors - Coopers & Lybrand L.L.P., filed
herewith.
(18) Rule 18f-3 Multi-Class Plan, Incorporated by reference
to Post-Effective Amendment No. 3 to the Registration
Statement filed on April 4, 1995.
(27)(a) Financial Data Schedule for the LifePath 2000 Fund
(Retail Class), filed herewith.
(b) Financial Data Schedule for the LifePath 2000 Fund
(Institutional Class), filed herewith.
(c) Financial Data Schedule for the LifePath 2010 Fund
(Retail Class), filed herewith.
(d) Financial Data Schedule for the LifePath 2010 Fund
(Institutional Class), filed herewith.
(e) Financial Data Schedule for the LifePath 2020 Fund
(Retail Class), filed herewith.
C-2
<PAGE> 209
(f) Financial Data Schedule for the LifePath 2020
(Institutional Class), filed herewith.
(g) Financial Data Schedule for the LifePath 2030 Fund
(Retail Class), filed herewith.
(h) Financial Data Schedule for the LifePath 2030 Fund
(Institutional Class), filed herewith.
(i) Financial Data Schedule for the LifePath 2040 Fund
(Retail Class), filed herewith.
(j) Financial Data Schedule for the LifePath 2040 Fund
(Institutional Class), filed herewith.
Item 25. Persons Controlled by or Under Common Control with
Registrant
As of June 19, 1995, each of the LifePath Funds owned approximately
100% of the corresponding Master Series of Master Investment
Portfolio and therefore could be considered a controlling person of
the corresponding Master Series for purposes of the 1940 Act.
Item 26. Number of Holders of Securities
As of May 31, 1995, number of record holders of each class of
securities of the Registrant is as follows:
<TABLE>
Number of Record
Title of Class Holders
-------------- ----------------
<S> <C>
Shares of beneficial
interest, $.001 per share,
of the following portfolios:
LifePath 2000 Fund
Retail Class 3053
Institutional Class 1168
LifePath 2010 Fund
Retail Class 3116
Institutional Class 1976
LifePath 2020 Fund
Retail Class 5797
Institutional Class 2874
LifePath 2030 Fund
Retail Class 4367
Institutional Class 1992
LifePath 2040 Fund
Retail Class 7171
Institutional Class 1943
</TABLE>
C-3
<PAGE> 210
<TABLE>
<CAPTION>
Number of Record
Title of Class Holders
- -------------- ----------------
<S> <C>
Small/Medium Stock Index Fund 1
International Stock Index Fund 1
Short-Term Allocation Fund 1
Managed S&P Fund 1
Prime Money Market Reserve Fund 1
</TABLE>
Item 27. Indemnification
Reference is made to Article Eight of the Registrant's Declaration of
Trust. The application of these provisions is limited by Article 10 of the
Registrant's By-Laws filed as and by the following undertaking set forth in the
rules promulgated by the Securities and Exchange Commission:
Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to trustees, officers and controlling persons of
the registrant pursuant to the foregoing provisions, or otherwise, the
registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in such
Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
registrant of expenses incurred or paid by a trustee, officer or controlling
person of the registrant in the successful defense of any action, suit or
proceeding) is asserted by such trustee, officer or controlling person in
connection with the securities being registered, the registrant will, unless in
the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in such Act
and will be governed by the final adjudication of such issue.
Item 28. Business and Other Connections of the Investment Adviser
Wells Fargo Bank, N.A. ("Wells Fargo Bank"), a wholly owned subsidiary
of Wells Fargo & Company, serves as investment adviser to all of the Master
Series' investment portfolios, and to certain other registered open-end
management investment companies. Wells Fargo Bank's business is that of a
national banking association with respect to which it conducts a variety of
commercial banking and trust activities.
To the knowledge of Registrant, none of the directors or executive
officers of Wells Fargo Bank, except those set forth below, is or has been at
any time during the past two fiscal
C-4
<PAGE> 211
years engaged in any other business, profession, vocation or employment of a
substantial nature, except that certain executive officers also hold various
positions with and engage in business for Wells Fargo & Company. Set forth
below are the names and principal businesses of the directors and executive
officers of Wells Fargo Bank who are or during the past two fiscal years have
been engaged in any other business, profession, vocation or employment of a
substantial nature for their own account or in the capacity of director,
officer, employee, partner or trustee. All the directors of Wells Fargo Bank
also serve as directors of Wells Fargo & Company.
<TABLE>
<CAPTION>
Principal Business(es) During at
Name Position(s) Least the Last Two Fiscal Years
- ---- ----------- --------------------------------
<S> <C> <C>
H. Jesse Arnelle Director Senior Partner of Arnelle & Hastie,
Director of FPL Group, Inc.
William R. Breuner Director General Partner in Breuner
Associates, Breuner Properties and
Breuner-Pevarnick Real Estate
Developers. Vice Chairman of the
California State Railroad Museum
Foundation. Retired Chairman of the
Board of Directors of John Breuner
Co.
Williams S. Davila Director President and Director of The Vons
Companies, Inc. Officer of Western
Assoc. of Food Chains.
Rayburn S. Dezember Director Former Chairman of Central Pacific
Corp. Director of CalMat Co., Tejon
Ranch Co., Turner Casting Inc., The
Bakersfield Californian and Kern
County Economic Development Corp.
Chairman of the Board of Trustees of
Whittier College.
Paul Hazen Chairman of the Chairman of the Board of Directors of
Board of Wells Fargo & Company. Director of
Directors Pacific Telesis Group, Phelps Dodge
Corp. and Safeway Inc.
Robert K. Jaedicke Director Accounting Professor and Dean
Emeritus of Graduate School of
Business, Stanford University.
Director of Homestake Mining Co.,
California Water Service Company,
Boise Cascade Corp., Enron Corp. and
GenCorp, Inc.
Paul A. Miller Director Chairman of Executive Committee and
Director of Pacific Enterprises.
</TABLE>
C-5
<PAGE> 212
<TABLE>
<S> <C> <C>
Trustee of Mutual Life Insurance
Company of New York. Director of
Newhall Management Corporation.
Trustee of University of Southern
California.
Ellen M. Newman Director President of Ellen Newman Associates.
Chair of Board of Trustees of
University of California at San
Francisco Foundation. Director of
American Conservatory Theatre and
California Chamber of Commerce.
Philip J. Quigley Director Chairman and Chief Executive Officer
of Pacific Telesis Group.
Carl E. Reichardt Director Director of Ford Motor Company,
Hospital Corporation of America,
HCA-Hospital Corp. of America,
Pacific Gas and Electric Company and
Newhall Management Corporation.
Donald B. Rice Director President and Chief Operating
Officer, Teledyne, Inc.
Susan G. Swenson Director President and Chief Executive Officer
of Cellular One.
Chang-Lin Tien Director Chancellor of University of
California at Berkeley.
John A. Young Director Retired President, Director and Chief
Executive Officer of Hewlett-Packard
Company. Director of Chevron
Corporation.
William F. Zuendt President President of Wells Fargo & Company.
Director of 3Com Corporation and
MasterCard International.
</TABLE>
Item 29. Principal Underwriters
(a) Stephens Inc., distributor for the Registrant, does not presently
act as investment adviser for any other registered investment companies, but
does act as principal underwriter for Overland Express Funds, Inc., Stagecoach
Funds, Inc., Stagecoach Inc. and Life & Annuity Trust and is the exclusive
placement agent for Master Investment Trust, Managed Series Investment Trust
and Master Investment Portfolio, all of which are registered open-end
management investment companies.
(b) Information with respect to each director and
officer of the principal underwriter is incorporated by reference
to Form ADV and Schedules A and D filed by Stephens Inc. with the
C-6
<PAGE> 213
Securities and Exchange Commission pursuant to The Investment Advisers Act
of 1940 (file No. 501-15510).
(c) Not applicable.
Item 30. Location of Accounts and Records
All accounts, books and other documents required to be maintained by
Section 31(a) of the Investment Company Act of 1940 and the Rules thereunder
are maintained at one or more of the following offices: Stagecoach Trust
maintains those accounts, books and other documents required by Rule
31a-1(b)(4) and (d), Rule 31a-2(a)(3) and (c) at Stephens Inc. 111 Center
Street, Little Rock, Arkansas 72201; Wells Fargo Bank, N.A. maintains all
other accounts, books or other documents required by Rules 31a-1, 31a-2 and
31a-3 at 525 Market Street, San Francisco, California 94105 or 45 Fremont
Street, San Francisco, California 94105, and copies of such documents also are
maintained by Stagecoach Trust. Original and/or copies of certain of the
accounts, books or other documents relating to the Funds may be retained by
Wells Fargo Nikko Investment Advisors, 45 Fremont Street, San Francisco,
California 94105, in its capacity as sub-adviser.
Item 31. Management Services
Not Applicable
Item 32. Undertakings
Registrant hereby undertakes
(1) to call a meeting of shareholders for the purpose of voting
upon the question of removal of a trustee or trustees when
requested in writing to do so by the holders of at least 10% of
the Registrant's outstanding shares of beneficial interest and in
connection with such meeting to comply with the provisions of
Section 16(c) of the Investment Company Act of 1940 relating to
shareholder communications; and
(2) to furnish each person to whom a prospectus is delivered with a
copy of its most current annual report to shareholders, upon
request and without charge.
C-7
<PAGE> 214
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant certifies that it meets all of
the requirements for effectiveness of this Post-Effective Amendment to the
Registration Statement pursuant to Rule 485(b) under the Securities Act of 1933
and has duly caused this Amendment to its Registration Statement on Form N-1A
to be signed on its behalf by the undersigned, thereto duly authorized, in the
City of Little Rock and State of Arkansas on the 26th day of June, 1995.
STAGECOACH TRUST
By /s/ Richard H. Blank, Jr.
--------------------------------------
(Richard H. Blank, Jr.)
Secretary and Treasurer
(Principal Financial Officer)
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement on Form N-1A has been signed below by the following
persons in the capacities and on the date indicated:
<TABLE>
<CAPTION>
Signature Title
--------- -----
<S> <C>
/s/ R. Greg Feltus Chairman and President
- ------------------------------- (Principal Executive Officer)
(R. Greg Feltus)
/s/ Richard H. Blank, Jr. Secretary and Treasurer
- ------------------------------- (Principal Financial Officer)
(Richard H. Blank, Jr.)
/s/ Jack S. Euphrat Trustee
- -------------------------------
(Jack S. Euphrat)
/s/ Thomas S. Goho Trustee
- -------------------------------
(Thomas S. Goho)
/s/ Zoe Ann Hines Trustee
- -------------------------------
(Zoe Ann Hines)
/s/ W. Rodney Hughes Trustee
- -------------------------------
(W. Rodney Hughes)
/s/ Robert M. Joses Trustee
- -------------------------------
(Robert M. Joses)
/s/ J. Tucker Morse Trustee
- -------------------------------
(J. Tucker Morse)
June 26, 1995
*By /s/ Richard H. Blank, Jr.
- -------------------------------
(Richard H. Blank, Jr.)
As Attorney-in-Fact
</TABLE>
<PAGE> 215
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933
and the Investment Company Act of 1940, the Registrant certifies that
it meets all of the requirements for effectiveness of this Post-
Effective Amendment to the Registration Statement pursuant to Rule
485(b) under the Securities Act of 1933 and has duly caused this
Amendment to its Registration Statement on Form N-1A to be signed on
its behalf by the undersigned, thereto duly authorized, in the City of
Little Rock, State of Arkansas on the 26th day of June, 1995.
MASTER INVESTMENT PORTFOLIO
By /s/ Richard H. Blank, Jr.
--------------------------------------
(Richard H. Blank, Jr.)
Secretary and Treasurer
(Principal Financial Officer)
Pursuant to the requirements of the Securities Act of 1933,
this Registration Statement on Form N-1A has been signed below by the
following persons in the capacities and on the date indicated:
<TABLE>
<CAPTION>
Signature Title
--------- -----
<S> <C>
/s/ R. Greg Feltus Chairman, President
- ------------------------------- (Principal Executive Officer)
(R. Greg Feltus) and Trustee
/s/ Richard H. Blank, Jr. Secretary and Treasurer
- ------------------------------- (Principal Financial Officer)
(Richard H. Blank, Jr.)
/s/ Jack S. Euphrat Trustee
- -------------------------------
(Jack S. Euphrat)
/s/ Thomas S. Goho Trustee
- -------------------------------
(Thomas S. Goho)
/s/ Zoe Ann Hines Trustee
- -------------------------------
(Zoe Ann Hines)
/s/ W. Rodney Hughes Trustee
- -------------------------------
(W. Rodney Hughes)
/s/ Robert M. Joses Trustee
- -------------------------------
(Robert M. Joses)
/s/ J. Tucker Morse Trustee
- -------------------------------
(J. Tucker Morse)
June 26, 1995
*By /s/ Richard H. Blank, Jr.
- -------------------------------
(Richard H. Blank, Jr.)
As Attorney-in-Fact
</TABLE>
<PAGE> 216
STAGECOACH TRUST
FILE NOS. 33-64352; 811-7780
EXHIBIT INDEX
<TABLE>
<CAPTION>
Sequential
Exhibit Number Description Page No.
-------------- ----------- ----------
<S> <C> <C>
99.B10 Opinion and Consent of Counsel
99.B11(a) Consent of Auditors --
KPMG Peat Marwick LLP
99.B11(b) Consent of Auditors --
Coopers & Lybrand L.L.P.
27.1 Financial Data Schedule for the
LifePath 2000 Fund
(Retail Class)
27.2 Financial Data Schedule for the
LifePath 2000 Fund
(Institutional Class)
27.3 Financial Data Schedule for the
LifePath 2010 Fund
(Retail Class)
27.4 Financial Data Schedule for the
LifePath 2010 Fund
(Institutional Class)
27.5 Financial Data Schedule for the
LifePath 2020 Fund
(Retail Class)
27.6 Financial Data Schedule for the
LifePath 2020
(Institutional Class)
27.7 Financial Data Schedule for the
LifePath 2030 Fund
(Retail Class)
27.8 Financial Data Schedule for the
LifePath 2030 Fund
(Institutional Class)
27.9 Financial Data Schedule for the
LifePath 2040 Fund
(Retail Class)
27.10 Financial Data Schedule for the
LifePath 2040 Fund
(Institutional Class)
</TABLE>
<PAGE> 1
EXHIBIT 99.B10
June 26, 1995
Stagecoach Trust
111 Center Street
Little Rock, Arkansas 72201
Re: Shares of Beneficial Interest of
Stagecoach Trust
Gentlemen:
We refer to Post-Effective Amendment No. 10 to the Registration
Statement on Form N-1A (SEC File Nos. 33-64352 and 811-7780) (the "Registration
Statement") of Stagecoach Trust (the "Trust") relating to the registration of
an indefinite number of shares of beneficial interests of the Trust
(collectively, the "Shares").
We have been requested by the Trust to furnish this opinion as Exhibit
10 to the Registration Statement.
We have examined such records, documents, instruments, certificates of
public officials and of the Trust, made such inquiries of the Trust, and
examined such questions of law as we have deemed necessary for the purpose of
rendering the opinion set forth herein. We have assumed the genuineness of all
signatures and the authenticity of all items submitted to us as originals and
the conformity with originals of all items submitted to us as copies.
Based upon and subject to the foregoing, we are of the opinion that:
The issuance and sale of the Shares by the Trust have been duly and
validly authorized by all appropriate action, and upon delivery thereof and
payment therefor in accordance with the Registration Statement, the Shares will
be validly issued, fully paid and nonassessable by the Trust.
<PAGE> 2
Stagecoach Trust
June 26, 1995
Page Two
We consent to the inclusion of this opinion as an exhibit to the
Registration Statement.
In addition, we hereby consent to the use of our name and to the
reference to our firm under the caption "Legal Counsel" in the Prospectus and
"Counsel" in the Statement of Additional Information, both of which are
included as part of the Registration Statement.
Very truly yours,
/s/ MORRISON & FOERSTER
<PAGE> 1
EXHIBIT 99.B11(a)
INDEPENDENT AUDITORS' CONSENT
The Board of Trustees
Stagecoach Trust
We consent to incorporation by reference in the Stagecoach Trust
Post-Effective Amendment No. 4 to the Registration Statement Number 33-64352 on
Form N-1A under the Securities Act of 1933 and Amendment No. 6 to the
Registration Statement Number 811-7780 on Form N-1A under the Investment
Company Act of 1940 of our reports dated April 20, 1995 on the financial
statements and financial highlights of the LifePath 2000 Fund, LifePath 2010
Fund, LifePath 2020 Fund, LifePath 2030 Fund and LifePath 2040 Fund (five of
the series constituting Stagecoach Trust) (the "Funds") as of and for the year
ended February 28, 1995, which reports have been included in the Statements of
Additional Information of each of the aforementioned Funds. We also consent to
the reference to our firm under the headings "Financial Highlights" in the
prospectuses and "Independent Auditors" in the Statements of Additional
Information incorporated by reference into the prospectuses.
San Francisco, California /s/ KPMG Peat Marwick LLP
June 27, 1995
<PAGE> 1
EXHIBIT 99.B11(b)
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the inclusion in Post-Effective Amendment No. 4 to the
Registration Statement on Form N-1A (File No. 33-64352) of Stagecoach Trust for
the LifePath 2000 Fund, LifePath 2010 Fund, LifePath 2020 Fund, LifePath 2030
Fund, and LifePath 2040 Fund of our report dated April 20, 1995 on our audit of
the financial statements and financial highlights for LifePath 2000 Master
Series, LifePath 2010 Master Series, LifePath 2020 Master Series, LifePath
2030 Master Series, and LifePath 2040 Master Series (each a series of Master
Investment Portfolio) for the periods indicated thereon.
/s/ COOPERS & LYBRAND L.L.P.
San Francisco, California
June 26, 1995
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000906921
<NAME> STAGECOACH TRUST
<SERIES>
<NUMBER> 1
<NAME> LIFEPATH 2000 FUND-RETAIL CLASS
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> FEB-28-1995
<PERIOD-START> MAR-01-1994
<PERIOD-END> FEB-28-1995
<INVESTMENTS-AT-COST> 60,267,288
<INVESTMENTS-AT-VALUE> 60,312,597
<RECEIVABLES> 1,870,002
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 62,182,599
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 66,458
<TOTAL-LIABILITIES> 66,458
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 54,129,643
<SHARES-COMMON-STOCK> 5,503,209
<SHARES-COMMON-PRIOR> 1,000
<ACCUMULATED-NII-CURRENT> 472,022
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 114,639
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 45,309
<NET-ASSETS> 54,616,805
<DIVIDEND-INCOME> 172,305
<INTEREST-INCOME> 2,157,324
<OTHER-INCOME> 0
<EXPENSES-NET> 467,806
<NET-INVESTMENT-INCOME> 1,861,823
<REALIZED-GAINS-CURRENT> 167,080
<APPREC-INCREASE-CURRENT> 45,309
<NET-CHANGE-FROM-OPS> 2,074,212
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 1,272,285
<DISTRIBUTIONS-OF-GAINS> 47,137
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 8,149,639
<NUMBER-OF-SHARES-REDEEMED> 2,775,736
<SHARES-REINVESTED> 129,306
<NET-CHANGE-IN-ASSETS> 62,106,141
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 467,806
<AVERAGE-NET-ASSETS> 39,547,000
<PER-SHARE-NAV-BEGIN> 10.00
<PER-SHARE-NII> 0.34
<PER-SHARE-GAIN-APPREC> (0.14)
<PER-SHARE-DIVIDEND> 0.27
<PER-SHARE-DISTRIBUTIONS> 0.01
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 9.92
<EXPENSE-RATIO> 1.20
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000906921
<NAME> STAGECOACH TRUST
<SERIES>
<NUMBER> 1
<NAME> LIFEPATH 2000 FUND-INSTITUTIONAL CLASS
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> FEB-28-1995
<PERIOD-START> MAR-01-1994
<PERIOD-END> FEB-28-1995
<INVESTMENTS-AT-COST> 60,267,288
<INVESTMENTS-AT-VALUE> 60,312,597
<RECEIVABLES> 1,870,002
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 62,182,599
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 66,458
<TOTAL-LIABILITIES> 66,458
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 7,354,528
<SHARES-COMMON-STOCK> 754,459
<SHARES-COMMON-PRIOR> 1,000
<ACCUMULATED-NII-CURRENT> 472,022
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 114,639
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 45,309
<NET-ASSETS> 7,499,336
<DIVIDEND-INCOME> 172,305
<INTEREST-INCOME> 2,157,324
<OTHER-INCOME> 0
<EXPENSES-NET> 467,806
<NET-INVESTMENT-INCOME> 1,861,823
<REALIZED-GAINS-CURRENT> 167,080
<APPREC-INCREASE-CURRENT> 45,309
<NET-CHANGE-FROM-OPS> 2,074,212
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 117,516
<DISTRIBUTIONS-OF-GAINS> 5,304
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 905,140
<NUMBER-OF-SHARES-REDEEMED> 164,464
<SHARES-REINVESTED> 12,783
<NET-CHANGE-IN-ASSETS> 62,106,141
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 467,806
<AVERAGE-NET-ASSETS> 39,547,000
<PER-SHARE-NAV-BEGIN> 10.00
<PER-SHARE-NII> 0.35
<PER-SHARE-GAIN-APPREC> (0.12)
<PER-SHARE-DIVIDEND> 0.28
<PER-SHARE-DISTRIBUTIONS> 0.01
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 9.94
<EXPENSE-RATIO> 0.95
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000906921
<NAME> STAGECOACH TRUST
<SERIES>
<NUMBER> 2
<NAME> LIFEPATH 2010 FUND-RETAIL CLASS
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> FEB-28-1995
<PERIOD-START> MAR-01-1994
<PERIOD-END> FEB-28-1995
<INVESTMENTS-AT-COST> 48,763,974
<INVESTMENTS-AT-VALUE> 49,328,919
<RECEIVABLES> 510,786
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 49,839,705
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 48,149
<TOTAL-LIABILITIES> 48,149
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 36,136,528
<SHARES-COMMON-STOCK> 3,678,991
<SHARES-COMMON-PRIOR> 1,000
<ACCUMULATED-NII-CURRENT> 314,113
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 83,416
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 564,945
<NET-ASSETS> 36,763,683
<DIVIDEND-INCOME> 234,457
<INTEREST-INCOME> 1,391,008
<OTHER-INCOME> 0
<EXPENSES-NET> 331,875
<NET-INVESTMENT-INCOME> 1,293,590
<REALIZED-GAINS-CURRENT> 298,374
<APPREC-INCREASE-CURRENT> 564,945
<NET-CHANGE-FROM-OPS> 2,156,909
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 792,655
<DISTRIBUTIONS-OF-GAINS> 164,665
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 4,487,768
<NUMBER-OF-SHARES-REDEEMED> 906,606
<SHARES-REINVESTED> 97,829
<NET-CHANGE-IN-ASSETS> 49,781,556
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 331,875
<AVERAGE-NET-ASSETS> 28,839,000
<PER-SHARE-NAV-BEGIN> 10.00
<PER-SHARE-NII> 0.34
<PER-SHARE-GAIN-APPREC> (0.02)
<PER-SHARE-DIVIDEND> 0.28
<PER-SHARE-DISTRIBUTIONS> 0.05
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 9.99
<EXPENSE-RATIO> 1.20
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000906921
<NAME> STAGECOACH TRUST
<SERIES>
<NUMBER> 2
<NAME> LIFEPATH 2010 FUND INSTITUTIONAL CLASS
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> FEB-28-1995
<PERIOD-START> MAR-01-1994
<PERIOD-END> FEB-28-1995
<INVESTMENTS-AT-COST> 48,763,974
<INVESTMENTS-AT-VALUE> 49,328,919
<RECEIVABLES> 510,786
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 49,839,705
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 48,149
<TOTAL-LIABILITIES> 48,149
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 12,692,554
<SHARES-COMMON-STOCK> 1,299,540
<SHARES-COMMON-PRIOR> 1,000
<ACCUMULATED-NII-CURRENT> 314,113
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 83,416
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 564,945
<NET-ASSETS> 13,027,873
<DIVIDEND-INCOME> 234,457
<INTEREST-INCOME> 1,391,008
<OTHER-INCOME> 0
<EXPENSES-NET> 331,875
<NET-INVESTMENT-INCOME> 1,293,590
<REALIZED-GAINS-CURRENT> 298,374
<APPREC-INCREASE-CURRENT> 564,945
<NET-CHANGE-FROM-OPS> 2,156,909
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 792,655
<DISTRIBUTIONS-OF-GAINS> 164,665
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 1,459,857
<NUMBER-OF-SHARES-REDEEMED> 186,023
<SHARES-REINVESTED> 24,706
<NET-CHANGE-IN-ASSETS> 49,781,556
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 331,875
<AVERAGE-NET-ASSETS> 28,839,000
<PER-SHARE-NAV-BEGIN> 10.00
<PER-SHARE-NII> 0.33
<PER-SHARE-GAIN-APPREC> 0.01
<PER-SHARE-DIVIDEND> 0.27
<PER-SHARE-DISTRIBUTIONS> 0.05
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 10.02
<EXPENSE-RATIO> 0.95
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000906921
<NAME> STAGECOACH TRUST
<SERIES>
<NUMBER> 3
<NAME> LIFEPATH 2020 FUND-RETAIL CLASS
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> FEB-28-1995
<PERIOD-START> MAR-01-1994
<PERIOD-END> FEB-28-1995
<INVESTMENTS-AT-COST> 79,569,899
<INVESTMENTS-AT-VALUE> 81,933,300
<RECEIVABLES> 801,332
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 82,734,632
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 81,120
<TOTAL-LIABILITIES> 81,120
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 63,834,565
<SHARES-COMMON-STOCK> 6,494,010
<SHARES-COMMON-PRIOR> 1,000
<ACCUMULATED-NII-CURRENT> 416,342
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 31,741
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 2,363,401
<NET-ASSETS> 66,035,796
<DIVIDEND-INCOME> 630,985
<INTEREST-INCOME> 1,611,548
<OTHER-INCOME> 0
<EXPENSES-NET> 532,029
<NET-INVESTMENT-INCOME> 1,710,504
<REALIZED-GAINS-CURRENT> 31,741
<APPREC-INCREASE-CURRENT> 2,363,401
<NET-CHANGE-FROM-OPS> 4,105,646
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 1,059,929
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 7,760,327
<NUMBER-OF-SHARES-REDEEMED> 1,373,325
<SHARES-REINVESTED> 107,008
<NET-CHANGE-IN-ASSETS> 82,643,512
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 532,029
<AVERAGE-NET-ASSETS> 46,094,000
<PER-SHARE-NAV-BEGIN> 10.00
<PER-SHARE-NII> 0.28
<PER-SHARE-GAIN-APPREC> 0.12
<PER-SHARE-DIVIDEND> 0.23
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 10.17
<EXPENSE-RATIO> 1.20
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000906921
<NAME> STAGECOACH TRUST
<SERIES>
<NUMBER> 3
<NAME> LIFEPATH 2020 FUND-INSTITUTIONAL CLASS
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> FEB-28-1995
<PERIOD-START> MAR-01-1994
<PERIOD-END> FEB-28-1995
<INVESTMENTS-AT-COST> 79,569,899
<INVESTMENTS-AT-VALUE> 81,933,300
<RECEIVABLES> 801,332
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 82,734,632
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 81,120
<TOTAL-LIABILITIES> 81,120
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 16,007,463
<SHARES-COMMON-STOCK> 1,634,490
<SHARES-COMMON-PRIOR> 1,000
<ACCUMULATED-NII-CURRENT> 416,342
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 31,741
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 2,363,401
<NET-ASSETS> 16,617,716
<DIVIDEND-INCOME> 630,985
<INTEREST-INCOME> 1,611,548
<OTHER-INCOME> 0
<EXPENSES-NET> 532,029
<NET-INVESTMENT-INCOME> 1,710,504
<REALIZED-GAINS-CURRENT> 31,741
<APPREC-INCREASE-CURRENT> 2,363,401
<NET-CHANGE-FROM-OPS> 4,105,646
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 234,233
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 2,005,382
<NUMBER-OF-SHARES-REDEEMED> 396,096
<SHARES-REINVESTED> 24,204
<NET-CHANGE-IN-ASSETS> 82,643,512
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 532,029
<AVERAGE-NET-ASSETS> 46,094,000
<PER-SHARE-NAV-BEGIN> 10.00
<PER-SHARE-NII> 0.30
<PER-SHARE-GAIN-APPREC> 0.12
<PER-SHARE-DIVIDEND> 0.25
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 10.17
<EXPENSE-RATIO> 0.95
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000906921
<NAME> STAGECOACH TRUST
<SERIES>
<NUMBER> 4
<NAME> LIFEPATH 2030 FUND RETAIL CLASS
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> FEB-28-1995
<PERIOD-START> MAR-01-1994
<PERIOD-END> FEB-28-1995
<INVESTMENTS-AT-COST> 48,375,538
<INVESTMENTS-AT-VALUE> 50,425,647
<RECEIVABLES> 459,054
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 50,884,701
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 49,763
<TOTAL-LIABILITIES> 49,763
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 39,469,433
<SHARES-COMMON-STOCK> 4,044,617
<SHARES-COMMON-PRIOR> 1,000
<ACCUMULATED-NII-CURRENT> 222,289
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> (183,134)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 2,050,109
<NET-ASSETS> 41,153,295
<DIVIDEND-INCOME> 482,604
<INTEREST-INCOME> 822,159
<OTHER-INCOME> 0
<EXPENSES-NET> 330,189
<NET-INVESTMENT-INCOME> 974,574
<REALIZED-GAINS-CURRENT> (183,134)
<APPREC-INCREASE-CURRENT> 2,050,109
<NET-CHANGE-FROM-OPS> 2,841,549
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 626,319
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 4,756,966
<NUMBER-OF-SHARES-REDEEMED> 776,623
<SHARES-REINVESTED> 64,274
<NET-CHANGE-IN-ASSETS> 50,824,938
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 330,189
<AVERAGE-NET-ASSETS> 28,569,000
<PER-SHARE-NAV-BEGIN> 10.00
<PER-SHARE-NII> 0.26
<PER-SHARE-GAIN-APPREC> 0.13
<PER-SHARE-DIVIDEND> 0.22
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 10.17
<EXPENSE-RATIO> 1.20
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000906921
<NAME> STAGECOACH TRUST
<SERIES>
<NUMBER> 4
<NAME> LIFEPATH 2030 FUND INSTITUTIONAL CLASS
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> FEB-28-1995
<PERIOD-START> MAR-01-1994
<PERIOD-END> FEB-28-1995
<INVESTMENTS-AT-COST> 48,375,538
<INVESTMENTS-AT-VALUE> 50,425,647
<RECEIVABLES> 459,054
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 50,884,701
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 49,763
<TOTAL-LIABILITIES> 49,763
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 9,276,241
<SHARES-COMMON-STOCK> 950,599
<SHARES-COMMON-PRIOR> 1,000
<ACCUMULATED-NII-CURRENT> 222,289
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> (183,134)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 2,050,109
<NET-ASSETS> 9,681,643
<DIVIDEND-INCOME> 482,604
<INTEREST-INCOME> 822,159
<OTHER-INCOME> 0
<EXPENSES-NET> 330,189
<NET-INVESTMENT-INCOME> 974,574
<REALIZED-GAINS-CURRENT> (183,134)
<APPREC-INCREASE-CURRENT> 2,050,109
<NET-CHANGE-FROM-OPS> 2,841,549
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 125,966
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 1,121,285
<NUMBER-OF-SHARES-REDEEMED> 184,769
<SHARES-REINVESTED> 13,083
<NET-CHANGE-IN-ASSETS> 50,824,938
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 330,189
<AVERAGE-NET-ASSETS> 28,569,000
<PER-SHARE-NAV-BEGIN> 10.00
<PER-SHARE-NII> 0.29
<PER-SHARE-GAIN-APPREC> 0.14
<PER-SHARE-DIVIDEND> 0.25
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 10.18
<EXPENSE-RATIO> 0.95
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000906921
<NAME> STAGECOACH TRUST
<SERIES>
<NUMBER> 5
<NAME> LIFEPATH 2040 FUND RETAIL CLASS
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> FEB-28-1995
<PERIOD-START> MAR-01-1994
<PERIOD-END> FEB-25-1995
<INVESTMENTS-AT-COST> 63,632,588
<INVESTMENTS-AT-VALUE> 66,761,734
<RECEIVABLES> 437,158
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 67,198,892
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 486,300
<TOTAL-LIABILITIES> 486,300
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 53,831,397
<SHARES-COMMON-STOCK> 5,471,713
<SHARES-COMMON-PRIOR> 1,000
<ACCUMULATED-NII-CURRENT> 212,649
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 38,771
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 3,129,146
<NET-ASSETS> 56,737,041
<DIVIDEND-INCOME> 772,325
<INTEREST-INCOME> 456,448
<OTHER-INCOME> 0
<EXPENSES-NET> 400,371
<NET-INVESTMENT-INCOME> 828,402
<REALIZED-GAINS-CURRENT> 38,771
<APPREC-INCREASE-CURRENT> 3,129,146
<NET-CHANGE-FROM-OPS> 3,996,319
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 515,015
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 6,450,959
<NUMBER-OF-SHARES-REDEEMED> 1,031,827
<SHARES-REINVESTED> 52,581
<NET-CHANGE-IN-ASSETS> 66,702,592
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 400,371
<AVERAGE-NET-ASSETS> 34,738,000
<PER-SHARE-NAV-BEGIN> 10.00
<PER-SHARE-NII> 0.18
<PER-SHARE-GAIN-APPREC> 0.34
<PER-SHARE-DIVIDEND> 0.15
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 10.37
<EXPENSE-RATIO> 1.20
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000906921
<NAME> STAGECOACH TRUST
<SERIES>
<NUMBER> 5
<NAME> LIFEPATH 2040 FUND INSTITUTIONAL CLASS
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> FEB-28-1995
<PERIOD-START> MAR-01-1994
<PERIOD-END> FEB-28-1995
<INVESTMENTS-AT-COST> 63,632,588
<INVESTMENTS-AT-VALUE> 66,761,734
<RECEIVABLES> 437,158
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 67,198,892
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 486,300
<TOTAL-LIABILITIES> 486,300
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 9,500,629
<SHARES-COMMON-STOCK> 961,668
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 212,649
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 38,771
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 3,129,146
<NET-ASSETS> 9,975,551
<DIVIDEND-INCOME> 772,325
<INTEREST-INCOME> 456,448
<OTHER-INCOME> 0
<EXPENSES-NET> 400,371
<NET-INVESTMENT-INCOME> 828,402
<REALIZED-GAINS-CURRENT> 38,771
<APPREC-INCREASE-CURRENT> 3,129,146
<NET-CHANGE-FROM-OPS> 3,996,319
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 100,738
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 1,198,550
<NUMBER-OF-SHARES-REDEEMED> 248,200
<SHARES-REINVESTED> 10,318
<NET-CHANGE-IN-ASSETS> 66,702,592
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 400,371
<AVERAGE-NET-ASSETS> 34,738,000
<PER-SHARE-NAV-BEGIN> 10.00
<PER-SHARE-NII> 0.20
<PER-SHARE-GAIN-APPREC> 0.34
<PER-SHARE-DIVIDEND> 0.17
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 10.37
<EXPENSE-RATIO> 0.95
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
